BARELY a day after US President Donald Trump threatened to cut funding to South Africa because of the country’s new land expropriation laws, one of his biggest backers – Elon Musk – piled the pressure on President Cyril Ramaphosa, asking in an X post: “Why do you have openly racist ownership laws?”
Musk, the SA-born billionaire who made it big in the US, was reacting to Ramaphosa’s response to Trump on his claims that SA “is confiscating land” through expropriation.
However, Musk’s comments are in relation to ambitions by his SpaceX Starlink internet satellite business to secure an operating licence in SA without any black economic empowerment (BEE) restrictions.
SA’s BEE laws broadly require international companies operating in the country to have 30% ownership by previously disadvantaged local groups.
SpaceX has argued that the current BEE laws create a significant barrier for international satellite operators like Starlink and requested reconsideration of the policy before entering the South African market.
However, the Communications Committee in Parliament last week insisted that Starlink must comply with SA’s BEE laws.
Communications Committee chair Khusela Diko was asked about SpaceX’s submission to the Independent Communications Authority of South Africa (Icasa). Diko reiterated the government’s stance that no company can bypass the country’s regulations, particularly the 30% BEE ownership requirement for businesses in the telecommunications sector.
Musk is a close ally of Trump, and the US president’s latest broadside on SA’s land expropriation laws incidentally comes within days of the SA parliamentary committee’s comments on Starlink.
Ramaphosa’s spokesperson Vincent Magwenya also weighed in on Musk’s post to the president, saying Musk should keep in mind that as a result of the devastating legacy of centuries of oppressive and brutal colonialism and apartheid, the SA Constitution provides for redressing the ills of the past.
Many prominent US companies have reduced or paused their diversity, equity, and inclusion initiatives (DEI) in the wake of the Trump presidency.
It also comes after the US Supreme Court’s decision to outlaw affirmative action in college admissions. Conservative activists in the US have viewed affirmative action programmes as divisive or unfair.
Like Trump, Musk is a fervent critic of DEI programmes in the US.
Starlink, a satellite internet constellation in low Earth orbit that is operated by SpaceX and offers internet coverage to more than 60 countries, will still need BEE compliance to operate in SA.
SpaceX started launching Starlink satellites in 2019, which are already available in Botswana, Mozambique, Nigeria, and Zambia. SA, however, has a much more advanced telecommunications industry than these countries.
Independent analyst Simon Brown says it is in the public interest for Starlink to be treated like other American tech companies and for it to adhere to the laws of South Africa.
“Everyone looks at the 30% number and that is true, but there are ways around that,” says Brown.
“The example locally is both Amazon and Microsoft, and to an even larger extent Alphabet/Google – [they] have operations in South Africa, and they don’t have 30% BEE partnership in their operations.
“Commitment to supplier development and skills transfer are some of the initiatives that help to meet the broader BEE criteria. For example, Microsoft and Google contribute to South Africa’s economy by investing in skills development programmes, training initiatives, and technology infrastructure projects.
“It is in the interest of fairness that we should really apply those laws. There are alternative ways and other tech companies from America are doing it,” says Brown.
“The whole thing is a lot of hot air and it’s being driven by Elon Musk.” – moneyweb.co.za
