South Africa's President Cyril Ramaphosa has expressed a desire for Elon Musk, the country's wealthiest citizen, to invest in South Africa. However, Musk's criticism of the South African government, labeling it as racist, has complicated these overtures. He has specifically opposed a law mandating foreign companies to sell ownership stakes to Black individuals or those affected by apartheid discrimination, arguing that it hinders his satellite internet service, Starlink, from operating in the country.
In response, South African official Solly Malatsi is working on a directive that would allow satellite internet providers, including Starlink, to obtain licenses by investing in disadvantaged communities instead of adhering to the Black ownership requirement. This directive is still subject to a public consultation process with the Independent Communications Authority of South Africa before it can be implemented.
Malatsi's proposal has faced criticism from political opponents who argue that it undermines efforts to address racial disparities established during apartheid. Khusela Sangoni Diko, chairwoman of the parliamentary committee overseeing telecommunications, accused Malatsi of compromising transformation goals and suggested that other satellite operators are willing to comply with existing regulations.
Despite the criticism, Malatsi maintains that the changes aim to stimulate economic growth by attracting a diverse range of companies, not solely Starlink. He noted that other sectors in South Africa already permit alternatives to Black ownership, which have successfully drawn investments.
The Black ownership rules were instituted after apartheid ended 30 years ago to economically uplift Black South Africans, who were previously barred from owning significant businesses. The ongoing debate over Starlink occurs within a tense political landscape, as Malatsi is part of the Democratic Alliance, the second-largest political party, which often clashes with the ruling African National Congress.
Starlink has expressed its potential to help the South African government achieve its goals of providing affordable, high-speed internet to underserved areas, thereby fostering economic growth and job creation. However, Musk's criticisms have led to mistrust among some officials regarding his influence over the country's internet infrastructure.
The South African government has accused Musk of spreading misinformation, particularly regarding claims of genocide against white South Africans and his views on land reform laws. These comments have contributed to a broader narrative against South Africa from certain political figures in the United States.
President Ramaphosa met with Musk in New York last year to discuss potential investments from Musk's companies, including Tesla and SpaceX, alongside Starlink's approval. However, these discussions are currently on hold due to concerns over Musk's recent statements and the resulting strain on relations with the U.S. government.
Starlink is already licensed in 20 African countries, with its service often selling out due to competitive pricing and faster internet speeds compared to traditional providers. Nevertheless, its expansion has faced challenges, including accusations from traditional telecommunications companies of receiving preferential treatment.
Khanya Mase-Mnyantsi of the Association of Comms and Technology emphasized the need for all companies to adhere to the same regulatory standards, stating that while competition is welcomed, it must occur within the established legal framework.