Latest news with #BlackEconomicEmpowerment
Bloomberg
2 hours ago
- Business
- Bloomberg
South Africa's Black Empowerment Laws and the Long Shadow of Apartheid
During the eras of colonialism and apartheid, Black South Africans were subjugated, denied a decent education, and excluded from the mainstream economy. Severe racial disparities endure to this day, more than three decades after the end of White-minority rule. South Africa ranks as one of the world's most unequal countries, according to analysis by the World Inequality Lab. The government has introduced a series of policies to try to narrow the wealth gap. While these Black-economic-empowerment measures have helped diversify corporate ownership and grow a Black middle class, critics say a small, politically connected elite have been the primary beneficiaries.
Business Insider
19 hours ago
- Business
- Business Insider
South Africa's push to amend BEE laws for Musk's Starlink triggers public backlash
The South African government is facing intense political backlash after changes to its Black Economic Empowerment (BEE) laws, potentially allowing Elon Musk's Starlink to operate in the country with exemptions from existing Black ownership requirements. The South African government is facing criticism for proposed changes to Black Economic Empowerment (BEE) laws. The new laws may allow foreign companies, such as Starlink, to bypass Black ownership requirements through alternative contributions. Critics claim this move undermines South Africa's existing empowerment policies aiming to correct historical injustices. As reported by the Financial Times, South Africa's Minister of Communications, Solly Malatsi revealed plans to allow telecom companies like Starlink to sidestep the 30% Black ownership law through ' equity equivalence ' initiatives, such as local partnerships, job creation, or supporting small businesses, in lieu of equity stakes The proposal follows public remarks by Musk that he has been locked out of South Africa's telecom market because he is " not Black." However, the timing and framing of the legislation has sparked intense criticism from opposition parties and civil society, who accuse the government of tailoring laws to benefit a powerful foreign billionaire. Criticism spreads over SA's BEE amendment Build One South Africa (BOSA), a prominent opposition party, has criticized the government's decision as a " backdoor deal" with Musk, arguing it unfairly favors the billionaire's interests over those of local businesses bound by BEE laws. According to BOSA deputy leader Nobuntu Hlazo-Webster " The message being sent is that if you are a powerful foreign billionaire, you can sidestep South Africa's laws, while our local businesses are forced to jump through hoops," BOSA spokesperson Roger Solomons also warned that the proposed exemption would allow Starlink to enter the market" under conditions favourable to them, not the country," He called the move " impulsive and reckless." Economic Freedom Fighters (EFF) leader Julius Malema echoed this sentiment, promising to oppose Starlink's entry in Parliament. ' We will not be dictated to by business,' Malema said, accusing the government of prioritizing corporate interests over national policy. Defense grows amid criticism Meanwhile, the ruling African National Congress (ANC) has defended BEE as essential to reversing the effects of apartheid, while the Democratic Alliance (DA), the second-largest party and a key coalition partner, is suing the government over existing BEE laws. DA MP James Lorimer called the proposed rules ' a death knell for foreign investment' "These ownership demands will crush what little appetite remains for investment in South African mining," He said. " The bill doubles down on failed transformation policies at a time when our economy needs growth." He added. The country's President Cyril Ramaphosa has stood firm against dismantling BEE, attributing South Africa's economic stagnation to concentrated ownership rather than empowerment policies. He said: "It is the partial and exclusive ownership of the means of production in our country that is holding this economy from growing," The controversy is consequent of a major political shift: the ANC, weakened by poor 2024 election results driven by public frustration over crime, unemployment, and inflation, has entered into a 10-party coalition, the first time since the end of apartheid that it has lost its wide majority. As Parliament debates the bill in the coming week, the government faces a balancing act; modernize economic policy to attract foreign innovation and investment or risk undermining the very affirmative action framework that has defined its post-apartheid vision.
IOL News
3 days ago
- Business
- IOL News
Starlink in South Africa: A lifeline or a Trojan Horse
Understanding Starlink: Costs and controversies in South Africa. Image: Reuters As South Africa contemplates relaxing Black Economic Empowerment (BEE) regulations to enable Elon Musk's Starlink to operate within its borders, a fierce national conversation must begin not about internet speeds, but about sovereignty, trust, and transformation. On the surface, Starlink is everything this country has been waiting for: a space-age solution to a deeply terrestrial problem. In a country where only 10–15% of rural households have stable internet and where countless schools, clinics and police stations still struggle with basic connectivity, the promise of fast, reliable satellite broadband sounds like nothing short of a miracle. But South Africa has been down this road before. Too often, technological 'solutions' have arrived draped in global capital, wrapped in good intentions, and laced with fine print that erodes local agency. And this time, it comes delivered by Elon Musk, a billionaire with a South African birth certificate but a political track record that suggests deep contempt for this country's values, institutions, and transformation agenda. Elon Musk has previously claimed Starlink was barred from operating in South Africa because he is not Black, an allegation South African officials refuted. Image: AFP Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Economic Implications: Bridging the Digital Divide By providing high-speed internet access, Starlink could spur educational opportunities, healthcare delivery, and economic development in regions currently lacking robust infrastructure. However, concerns persist regarding the affordability of Starlink's services for low-income households. The cost of equipment and subscriptions, currently upwards of R10,000 for the initial setup and about R1,000 per month, may remain prohibitive, thereby limiting the service's reach to those who might benefit most. Moreover, the impact on existing internet service providers and the broader telecommunications market dynamics warrants careful consideration to avoid unintended economic disruptions. Rural Connectivity in Numbers: What the Data Says According to recent Icasa and Stats SA data, only 1 in 10 rural households in South Africa have access to stable broadband internet. In provinces like the Eastern Cape, Limpopo, and parts of KwaZulu-Natal, connectivity levels fall far below even that, creating a chasm between urban and rural access to information and services. Schools and educational institutions in these areas face immense challenges, and teachers often lack digital resources, and learners cannot access online learning platforms. Police stations, clinics, and municipal offices in rural communities frequently struggle with outdated or unreliable internet, hampering everything from filing crime reports to accessing national health databases. If made accessible through government partnerships or subsidisation, Starlink could potentially revolutionise service delivery in these critical sectors. Reliable internet could enable: E-learning platforms, including access to online textbooks, Zoom classes, and coding workshops. Real-time data sharing and crime monitoring for police stations. Telemedicine services in rural clinics. The Infrastructure We Desperately Need South Africa needs a Starlink-like technology. Urgently. The digital divide is a national emergency. In many rural communities, schoolchildren are still being taught without internet access, educators are cut off from digital training resources, and police stations file paperwork by hand. For millions, reliable internet is not just a tool; it's the key to upward mobility, access to education, government services, employment and entrepreneurship. Fibre rollout has been uneven and slow, hampered by budget constraints, corruption, and poor planning. For many municipalities, it simply isn't coming. Starlink bypasses this bottleneck completely. Its satellite network can beam high-speed internet to anywhere in the country, virtually overnight. Its potential to transform rural economies, unlock innovation, and bridge geographic isolation is immense. If implemented responsibly, Starlink could become the backbone of South Africa's digital future. But there is a catch. And it's not a small one. Elon Musk: A Troubling Messenger for a Promising Message This isn't just about technology. It's about who controls it, what values they bring, and how they wield influence when they disagree with a sovereign state. Musk has made no secret of his disdain for South Africa's transformation policies. He has repeatedly called BEE 'racist', falsely implied that South Africa persecutes minorities, and re-platformed extremists on X (formerly Twitter) who push the debunked narrative of 'white genocide' in South Africa. He has also used his AI chatbot, Grok, to propagate misleading information about the country's crime, land reform, and race relations, often to an international audience unfamiliar with South Africa's nuanced, post-apartheid reality. In short, Musk has demonstrated he is not simply a tech CEO; he is a right-wing and racist political actor with a clear ideological agenda, one that aligns disturbingly well with global far-right narratives. The same man seeking control over vast swathes of South Africa's internet infrastructure is the man publicly undermining its constitutional efforts to redress historical inequality. Can Starlink Be a Trojan Horse? We must then consider a chilling possibility: what if Starlink is not just a communications tool but a potential ideological delivery mechanism? Because Starlink operates independently of local ISPs and existing telecom frameworks, it creates a 'grey zone' where South African regulatory oversight may be severely limited. Suppose Starlink users connect directly to satellites, bypassing local data routing. In that case, it becomes exponentially harder for Icasa or the Department of Communications to monitor or enforce content compliance, cybersecurity laws, or data protection standards. There is a real risk that Starlink's user interfaces could favour Musk-owned platforms, including X and Grok, by default, particularly in rural or first-time internet environments. In such areas, where people have never encountered the internet before, what they first encounter shapes their worldview. If their first exposure to global information comes filtered through Musk's ideological lens, South Africa may find itself nurturing a digitally colonised generation, raised on disinformation, anti-BEE sentiment, and narratives hostile to democracy and inclusion. Musk's history of publicly antagonising states, suggests that he does not hesitate to politicise access and operations. The infrastructure we welcome in a crisis could become a tool for coercion down the line. Desperation Must Not Lead to Dependency South Africa is not naïve. We know what foreign capital can do when left unchecked. We've seen the headlines about tech giants hoarding data, undermining labour rights, and lobbying against taxation and transformation. Yet we are also a country of immense potential, home to some of the most entrepreneurial, resilient, and digitally fluent young people on the continent. We deserve the best infrastructure the world can offer, but on our terms. Letting Starlink in without robust, transparent, and enforceable conditions would be an act of desperation masquerading as progress. It would open the floodgates for a private surveillance satellite network managed by a man who has shown hostility toward our democracy, contempt for our redress laws, and a worrying willingness to deploy his platforms in the service of racial disinformation. We Need the Technology, But Not the Ideology Here's the bottom line: South Africa needs what Starlink does. But we do not need what Musk represents. If Starlink wants to operate in South Africa, it must commit formally, contractually, and transparently to: Respecting BEE or offering clear, independently monitored equity equivalence programmes. Routing local traffic locally, with compliance with data protection laws. Maintaining strict neutrality in content prioritisation, with no bias toward X or Grok Submitting to regulatory oversight and policy compliance, like every other communications provider This is not a technophobic stance. It is a constitutionally grounded, economically rational one. We should welcome the infrastructure, but not on bended knee. Digital Inclusion Beyond Starlink: The Broader Blueprint While Starlink presents a high-tech, fast-paced solution, it cannot be the sole pillar of South Africa's digital inclusion strategy. More community-orientated, cost-effective models have shown promise and should be scaled up. Some alternatives include: TV White Space technology: Leveraging unused broadcasting frequencies to deliver broadband to remote areas at lower costs. Municipal broadband initiatives: Cities like Tshwane have experimented with free public Wi-Fi zones. A national roll-out of such models could bridge urban-rural divides. -Zero-rated data services: The success of zero-rated educational platforms like Siyavula and university portals during Covid-19 lockdowns shows how mobile networks can support learning and service delivery. Public-private infrastructure sharing: Local ISPs, in collaboration with the government and telecom giants, can pool resources to extend fibre-optic networks incrementally. Community mesh networks: Examples in Kenya and India show how decentralised, community-owned networks can operate at minimal costs with local buy-in and employment. These models foreground inclusivity, localisation and sustainability, important considerations if digital equity, and not just digital expansion, is the ultimate goal. Nco Dube a political economist, businessman, and social commentator. Image: Supplied
Eyewitness News
3 days ago
- Business
- Eyewitness News
Malatsi: Communications sector's proposed policy changes already provided for in law
CAPE TOWN - Minister of Communications Solly Malatsi has once again moved to defend proposed policy changes in the sector, saying he's not attempting to do anything not already provided for in law. Many believe the regulations are being designed to benefit foreign satellite company Starlink, the company of tech mogul Elon Musk. On Thursday, Minister in the Presidency Khumbudzo Ntshavheni, a former communications minister, said no discussions were had with Musk during government's visit to Washington last week. Malatsi has been at odds with political parties in Parliament this week - including the African National Congress (ANC), over regulations that would forego Black Economic Empowerment (BEE) requirements for communication operators in favour of equity equivalents. READ: Malatsi defends policy directive to ease company transformation targets and BEE requirements Responding to member's statements in the National Assembly on Thursday, Malatsi again sought to explain the move, telling the uMkhonto weSizwe (MK) Party that he was working within the prescripts of the Broad-Based Black Economic Empowerment (BBBEE) Act, passed during the administration of their leader, Jacob Zuma, in 2014. 'This is not some invention by a villager from Limpopo called Malatsi. It's there in the rules.' Answering questions at a post-Cabinet briefing earlier in the day, Ntshavheni also defended her actions as a former communications minister. 'We've never considered Starlink. I've never said that. I said South Africa considered developing or introducing satellite communication in the country.' Malatsi said the new regulations will create a more competitive environment for multiple operators.
IOL News
4 days ago
- Business
- IOL News
Is ANC cadre deployment causing the downfall of South Africa's state-owned enterprises?
Experts shed light on how cadre deployment has led to the collapse of state-owned enterprises. Image: Henk Kruger / Independent Newspapers The majority of people employed as chief executives, executives, and board members in state-owned entities are incompetent, do not know the sectors they operate in, are without skills, and don't even know what they are doing, experts say. Governance, economic, and political experts say that South African leaders lack the political will to fix the problems. The SOEs have cost the country billions of rand in bailouts. Many of them are struggling with massive debt, under-investment in infrastructure, and continuous reliance on government bailouts. Eskom, Transnet, South African Airways, Denel, and the South African Broadcasting Corporation (SABC) have accumulated significant losses and debt. The Treasury has since announced that no funds have been allocated to struggling SOEs. Video Player is loading. 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Advertisement Next Stay Close ✕ Professor William Gumede from the Wits School of Governance said incompetence is the main issue, resulting from hiring unskilled, politically connected people. 'Most of the CEOs, most of the boards, most of the executives are appointed because of their political connections. So, people are not appointed based on merit. They do not know what they are doing, they don't know how to manage an organisation, and they also don't know the sector where they are operating. 'Sometimes you may not know the sector, but if you are very well skilled, you'll be able to turn around something. But now, often what happens with politically connected people that get appointed is they don't know the sector, are also not competent, so you have a double destruction of entities,' Gumede said. He added that the second problem is corruption, where procurement processes are manipulated based on Black Economic Empowerment. 'They don't appoint capable black-owned companies, they appoint politically connected companies, who don't deliver. 'So you (SOEs) pay for services that don't get delivered. Many of these companies inflate the prices. So, there are double and triple payments for products and services, for no delivery. They suck the money out of the entities without delivering services also. 'Even if there was corruption, if services are delivered, at least one could say that at least services are being rendered, but now there are no services and there is no money left. 'So, now you are left with management and board members without appropriate skills, not knowing the sector, not knowing the entity, and then they run the entity into financial distress. And then you have your empowerment process, which has been abused and manipulated, and you lose money there also,' he explained. He added that another challenge is that many of the entities are very unionised. And the unions are aligned with the ANC as part of the Tripartite Alliance. 'Often, union members can't be fired by the entities because they just go to the union. And the union will protect them, or it will even go straight to the president. I know, at Eskom for example, instances where senior union leaders, who are part of the staff, and when the CEO wants to fire them, they actually phone the president straight. 'So, it means they are untouchable, they don't have to work. They don't have to be efficient, they don't have to be effective, and they cannot be fired,' he said. Gumede highlighted that at almost every level in the SOEs, there is political capture and interference. 'No one can be held accountable, no one can be fired. You can't fire the board, you can't fire the management, because they are all politically connected. You can't fire your staff because they are trade union connected, you can't fire the companies that don't deliver, because they are also politically connected. 'When the entities are bailed out, they are bailed out with the same things in place, so you've got the same management; you have the same board, the same staff, the same procurement companies that cannot be fired. So, the money just disappears into a hole all the time,' Gumede said. He said one of the moral hazards created by bailouts is that most people ideologically believe state companies should not close down because they create jobs. 'Bailing out a company without holding management and companies accountable is like throwing money into a bottomless pit. In fact, bailing out state entities is a misallocation of government resources. 'Black people who are competent but not politically connected get marginalised, they don't get jobs or promotions. Even competent black-owned companies get sidelined because they are not politically connected, and this becomes a lost opportunity to get the right people to turn things around,' Gumede said. 'Some of the entities must close down. If you can't improve performance even after a bailout, you have to close down, just like in the private sector.' He said the various SOE reform initiatives, such as Operation Vulindlela and the National State Enterprises Bill, don't reform anything, but waste state money and people's time. These bills miss the mark because people should be hired based on merit and fired if they don't perform. He said ordinary citizens are not doing enough. 'They must stop voting for political parties that fail to deliver. They must hold the entities accountable. They must be vocal about these issues,' he said. Politicians should not appoint the CEOs and boards of SOEs. That must be professionalised or left to an independent panel, and there must be public transparency in the process. Also, employees must be depoliticised, he said. Gumede was part of the 2009 Presidential Review Commission on SOEs, however, these have not been implemented despite being approved and adopted by the Cabinet. Under President Cyril Ramaphosa's administration, he was part of the Task Team on the Professionalisation of Public Services, and says that the recommendations have not been implemented. Professor Sipho Seepe, a political analyst from the University of Zululand, said there are no hurdles that stand in the way of the effective implementation of SOE reforms other than a political will. He said SOEs have been reduced to employment agencies for the politically connected. 'If the number one citizen (Ramaphosa) can be allowed to avoid accountability as far as the Phala Phala scandal is concerned, how can we expect lowly public servants not to do the same. The president must lead by example. So far, he has failed dismally. Until then, we should not be surprised that there is a general failure insofar as proper governance is concerned.' Dawie Roodt, a chief economist from Efficient Group, said: 'If there's one institution that I would like to blame for how we got here (failing SOEs), it is the ANC. Ideologically, the ANC believes and talks about the developmental state and centralisation. 'Secondly, they've got the policy of cadre deployment, and what often happens is that they employ people in positions because they are loyal to the party and not because they can do the job. Quite often, you find incompetent people in high positions. Thirdly, you often find very high levels of corruption. So, the combination of all these things inevitably then leads to the collapse of these state-owned enterprises.' Roodt said many of these SOEs are crucial to the economy. Eskom, for example, is important, but gradually, the economy is weaning itself off Eskom by putting in solar panels. Harbours are still very important for exports, and the railways. 'In the past, you had various levels of government. The lowest level of government is local authorities, which have their revenue sources, own tax base, and balance their books. They did not need the Minister of Finance. 'The same goes for the SOEs. The state-owned enterprises could wash their faces. They had their revenue sources, good-rated debt, like Eskom's debt. At one stage, it was better rated than the state's debt. They could stand on their own feet financially, but what has subsequently happened, not only at the state-owned enterprises, but local authorities, because of mismanagement and cadre deployment, they have been run into the ground operationally and financially. Those institutions now need to be bailed out by the central (national) government,' Roodt said. According to Roodt, the Minister of Finance has his problems, as the Department of Finance and others have been mismanaged. And in the process, state debt levels have reached a record high, but it's much worse than what we think because, since the SOE and local authorities are also depending on the state. He said there is a need to fix the country's political leadership before things can improve. One must look at the Zondo Commission's report and ask oneself why it has not been implemented. 'The problem is they are not prepared to act, and to enforce the laws. Zondo did all the work, and the reason why that has not been implemented is that the cadres are implicated. Proof is there for everybody to see; all they need to do is start prosecuting, but it is simply not happening. So if they don't implement the Zondo Commission report, then I do not have any hope that they will start acting against corruption,' Roodt said.
