South Africa's President, Cyril Ramaphosa, has expressed interest in encouraging Elon Musk, a prominent billionaire and native of the country, to invest in South Africa. However, Musk has been critical of the South African government's policies, labeling them as discriminatory, particularly a law mandating that foreign companies sell ownership stakes to Black individuals.
In response, South African telecommunications official Solly Malatsi is working on a directive that would allow satellite internet providers, including Musk's Starlink, to operate in the country by investing in disadvantaged communities rather than adhering to the ownership requirement.
This directive must undergo public consultation with the Independent Communications Authority of South Africa before it can be implemented. Critics, including Khusela Sangoni Diko, chairwoman of the parliamentary telecommunications committee, argue that this approach undermines efforts to address racial inequalities established during apartheid.
Malatsi contends the proposed changes aim to stimulate economic growth by attracting various companies, not solely Starlink. Alternatives to Black ownership, referred to as "equity equivalents," are already permitted in several sectors in South Africa and have been successful in attracting investment.
The original Black ownership rules were established post-apartheid to support the economic empowerment of Black South Africans, who were historically marginalized. The debate surrounding Starlink is complicated by the current political landscape, as Malatsi belongs to the Democratic Alliance, which often clashes with the ruling African National Congress.
Starlink has indicated its potential to assist the South African government in providing affordable, high-speed internet to underserved areas, contributing to economic growth and job creation. However, Musk's critiques of South Africa have led to mistrust among some officials who are wary of granting him significant control over internet connectivity.
The government has accused Musk of spreading misinformation, including claims about white South Africans facing genocide and mischaracterizing a land-reform law as racist. These comments have sparked tensions between the U.S. and South Africa, particularly following an executive order by the Trump administration that halted most American aid to South Africa.
In discussions last year, Ramaphosa and Musk considered potential investments in South Africa from Musk's companies, including Tesla and SpaceX. However, these negotiations are currently stalled due to concerns over Musk's recent statements and the resulting disinformation campaign against South Africa.
Starlink is operational in 20 African countries and is recognized for providing faster internet at competitive prices. Nevertheless, its entry into the African market has faced challenges, with traditional telecommunications companies alleging that Starlink receives preferential treatment.
Industry representatives, such as Khanya Mase-Mnyantsi from the Association of Comms and Technology, emphasize the importance of ensuring that all service providers adhere to the same regulatory standards and laws.