South Africa has unveiled a proposed overhaul of its Black economic empowerment laws in an effort to enable Elon Musk’s satellite internet service, Starlink, to operate in the country, according to the Financial Times. The move comes after Musk, a South African-born billionaire and key adviser to former U.S. President Donald Trump, criticized the current legislation as “openly racist.”
Under existing regulations, foreign telecom companies are required to sell 30% of their local equity to historically disadvantaged South Africans to qualify for operating licenses. Musk has repeatedly refused to comply with this requirement, arguing that it unfairly excludes white South Africans like himself. Despite never formally applying for a license, Musk’s complaints have triggered a broader policy debate and diplomatic tension.
Just days after a high-profile Oval Office meeting between President Cyril Ramaphosa and Donald Trump, South Africa’s communications minister Solly Malatsi proposed an alternative compliance path. Companies could instead invest in so-called “equity equivalence programmes” — initiatives such as supporting local suppliers, job creation, or small business development.
“The new requirements seek to provide the much-needed policy certainty to attract investment into the sector,” Malatsi said. The proposal is now open to public comment for 30 days.
While the government emphasized that the reform does not exempt firms from contributing to economic transformation, it aims to offer more flexible avenues to fulfill those obligations. Malatsi previously told the Financial Times that this approach could help expand broadband access to underserved rural populations, where internet connectivity remains critically low.
The push to amend the legislation gathered momentum after Trump harshly criticized South Africa’s race-based laws during the Oval Office meeting, claiming they were driving skilled white South Africans to emigrate. Musk later joined both presidents for a working lunch, further elevating the issue’s political profile.
The proposed changes mirror similar policies already in place in sectors like automotive manufacturing and have received cautious praise from several analysts. “If you look at a service like Starlink, this would be of huge benefit to rural communities,” said Johannesburg-based political analyst Ralph Mathekga. “It is unjustifiable to simply demand compliance with Black empowerment rules when this would harm the rest of the country.”
Starlink, owned by Musk’s company SpaceX, has already proven popular in rural areas of other African nations lacking broadband infrastructure. Lesotho, South Africa’s neighbor, granted Starlink a 10-year license last month in a move to soften U.S. trade penalties.
However, not all reactions have been positive. Critics accuse the government of weakening a core post-apartheid policy to appease a wealthy foreign investor. Julius Malema, leader of the leftwing Economic Freedom Fighters, vowed to oppose Starlink in parliament, accusing Musk of promoting “white genocide” conspiracy theories.
Black economic empowerment policies have long been central to the African National Congress’s platform, aiming to redress historic racial inequalities. By 2022, 60% of businesses in South Africa were Black-owned, up from 30% in 2019. However, critics say the policies are often misused by political elites and deter essential foreign investment.
The proposal marks a pivotal moment in South Africa’s balancing act between upholding its commitment to racial equity and attracting global tech investment. Whether the compromise will ultimately allow Starlink to enter the market — and whether it sets a precedent for future foreign tech ventures — remains to be seen.
