Opposition parties in South Africa have slammed the government’s intention to exempt Starlink, the technology company belonging to billionaire Elon Musk from having to fully comply with the country’s Broad Based Black Economic Empowerment which requires local enterprises owned by previously disadvantaged individuals to own not less than 30 percent of any foreign entities seeking to do business in SA.
This week Communications and Digital Technologies Minister Solly Malatsi issued a gazette exempting Starlink through a never used provision in the SITA ( State Information Technology Agency) Act that, following thorough consultation, foreign companies may alternatively invest an equivalent of the 30 percent stake in public infrastructure, a move condemned by the opposition as bending over backwards to accommodate the SA born Musk who is now also a key figure in the US Donald Trump administration and among those in the forefront of the misinformation campaign against South Africa.
uMkhonto weSizwe, the official opposition said the move opens up South Africa to infiltration and called for the suspension of the gazette issued by Malatsi as well as a parliamentary inquiry in the process he followed.
MK said even election results could easily be manipulated by outside forces it believes may now start dominating South Africa’s digital space.
“Ramaphosa, Steenhuisen, and their neoliberal allies are handing over SA’s digital future to Elon Musk’s Starlink, dismantling B-BBEE and local empowerment in the process. We demand transparency. We reject this betrayal that aims to hijack our Sovereignty through digitisation and E-Voting,” said MK.
The EFF also rejected the move alleging it was done under pressure from the USA following President Cyril Ramaphosa’s visit to the USA.
“The EFF rejects the false logic that transformation can be achieved without ownership. No amount of skills training or pilot programmes can replace direct equity, control, and wealth redistribution. This is a cowardly surrender to US imperialism and a directassault on Black economic participation. Starlink and similar entities must comply with the same laws that apply to local companies,” said EFF.
EFF also shares MK’s security concerns.
“Of more concern, is the clear national security threat posed by Starlink, as its owner has secured a manipulation of the laws of a country through the use of disinformation and by exerting his power and influence over the President of the US, who aided his business interests through aggressive foreign policy against South Africa. To surrender our telecommunications capabilities and allow him access and control in a country he has accused of a genocide, is a threat to our nation,” the EFF said.
The African Transformation Movement added its voice calling the move by the minister ‘the worst form of betrayal’.
“Minister Solly Malatsi claims this gazette, which bends over backwards to accommodate satellite companies like Musk’s Starlink, is about “attracting foreign investment.” But let us call it what it is, grovelling surrender to American imperialism! The ANC/DA coalition has sold out the aspirations of black South Africans, to appease billionaire elites who care nothing for our liberation. This is not policy, it is a betrayal of the highest order, and frankly, an impeachable offence against the people of this country and the principles of transformation,” said the party.
The ANC Youth League which has been frustrated with what it believes to be a liberal outlook of the Government of National Unity led by its mother-body, the African National Conference also slammed Malatsi and added to claims the move is meant to appease the USA and Musk.
“We are unapologetically against the racist Elon Musk’s company, Starlink, which continues to undermine transformation, exploit African markets, and spread anti-Black narratives globally. The Youth League is not afraid to call out imperialism wrapped in innovation. Nowhite owned foreign tech giant will be allowed to bypass South Africa’s transformative laws with the help of local sellouts and anti-Black lobby groups like AfriForum,” said the league in a statement.
Ramaphosa echoed Malatsi’s reasoning and denied his White House meeting with US President Donald Trump included discussions about StarLink.
“The Starlink issue, was it part of our discussions? No. What we were able, and this is part of the package that we’re talking about, is creating an environment for investments to take place. What do we want? We want U.S. companies to come and invest in South Africa. That is the real deal for us. We want foreign direct investment, and to do that we’ve got to create a conducive environment for FDI, for foreign direct investment, and where, for instance, in the past we’ve been able to do so and attract U.S. companies and utilise the regulatory frameworks, such as, instead of BEE compliance, you could have equity equivalence, and U.S. companies have embraced that. That shows that they are willing to go along with our regulatory framework, which we have crafted to attract investors to South Africa, and many other countries utilise a variety of ways to do that,” said Ramaphosa during a media briefing in Washington DC following a meeting with Trump.
The President said there was nothing unique with Musk’s exemption citing China as an example of a country that relaxed its empowerment legislation to accommodate a company, ironically that entity is electric car maker Tesla, also owned by Musk.
“I know, for instance, I was reading that when Tesla wanted to build a gigafactory, car manufacturing factory in China, they were required to have Chinese partners, and they had a negotiation with the Chinese government, and in the end, they dispensed with that regulatory compliance and allowed Tesla to invest directly as a sole company in building a giga-car manufacturing facility in China. So what did the Chinese do? They crafted their own regulatory framework, and they were able to come up with a creative way of enabling an investment to take place, because, one, they wanted to bring in an investor, two, create jobs in China, and all that. So similarly with us, there’s nothing wrong with South Africa to have, in the past, crafted an equity equivalence provision that has allowed many companies, Amazon, Microsoft, Google, you name them, they’ve utilised that same type of dispensation,” said Ramaphosa.