25-05-2025
Business leaders and opposition slam Malatsi's policy directive, say it is a threat to BBBEE
Communications and Digital Technologies Minister Solly Malatsi faces a backlash after a proposal to amend the digital communication policy for foreign communication companies to bypass the BEE requirement.
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Business organisations and opposition political parties have reacted strongly to the recent policy directive issued by the Minister of Communications and Digital Technologies Solly Malatsi that could allow the Starlink satellite internet service to operate in the country without the requisite BBBEE laws, saying this is a threat to black economic empowerment.
Critics of the move say that suggesting that Starlink, owned by Pretoria-born billionaire Elon Musk, might operate in South Africa without meeting the 30% HDG (historically disadvantaged groups) ownership requirement in the ICT sector—through an Equity Equivalent Programme (EEP), the Minister is attempting to recast the country's licensing laws through this policy directive.
They have also questioned the timing of Malatsi's gazette underf the Electronic Communications Act (ECT), a day after President Cyril Ramaphosa returned from his White House meeting with US President Donald Trump and Musk, who has condemned the country's empowerment laws.
Malatsi's spokesperson has denied that the directive was drafted to allow Musk to bypass regulatory requirements and said the timing of the publication was coincidence.
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Kganki Matabane, CEO of the Black Business Council (BBC) said Malatsi's policy directive means the country's sovereignty has been held at ransom by people who have been throwing insults against it.
"We are not against Starlink or the investment but against the changing of our laws to accommodate individuals and people who do not respect the country and its laws. We would have lost the country's sovereignty as no one is exempted from complying with the laws of the country,' he said.
These sentiments were also echoed by CEO of the Association of Comms and Technology (ACT), Nomvuyiso Batyi, who called for a proper market analysis to ensure the playing fields are levelled.
The ACT is a nonprofit organisation doing advocacy work for the ICT sector.
"We are calling for proper market analysis in order to check if the market is ready for such a directive and is done within the rule of law or it may have dire consequences. We are not against new entrants but are against lowering the bar for US interests, " she said.
Batyi said the ECA stipulated that multinationals seeking licenses to operate in South Africa must comply with the 30% black ownership rules and that a directive attempting to bypass the Act is not legal as the ECA beats equity equivalents.
BOSA Deputy president, Nobuntu Hlazo-Webster also weighed in on the matter saying if government can bend the country's regulations for international businesses, it can do the same for the country's businesses.
"BOSA calls on Malatsi, to make public the record of decision in this matter, so as to assure the people of South Africa that this was not a back door deal. This is not transformation, it's capitulation.
"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. What begins with special concessions, ends in state capture," Hlazo-Webster said in a statement issued on Sunday.
Leader of the African Transformation Movement (ATM), Vuyolwethu Zungula called for the immediate withdrawal of the gazette saying:" This government gazette, is nothing short of a shameless sellout to American oligarchs Elon Musk and Donald Trump—a move that spits in the face of our nation's transformation agenda.
"By rolling out the red carpet for Starlink and other American corporations, the ANC/DA coalition is handing over our digital future to foreign hands, undermining local businesses, and betraying the very people they swore to uplift. This is not transformation, it is neo-colonialism dressed up as 'investment"."
The MK party's spokesperson, Nhlamulo Ndhlela indicated that the party will not be taking the matter to court before it has exhausted all the parliamentary processes available which include requesting a formal legal opinion of the Parliamentary Legal Services in a bid to assess the constitutionality and procedural legality of the directive.
"We are attending a Department of Communications and Digital Technologies Portfolio Committee meeting in Parliament on Tuesday morning with the Minister. We will then make a determination from there,'" Ndhlela stated.
In a statement, Malatsi's spokesperson, Kwena Moloto said the minister is empowered by the EIPs, provided for under the Broad-Based Black Economic Empowerment Act (Act 53 of 2003) and the ICT Sector Code to initiate the directive.
"The minister is empowered by the the BEE Act which allows qualifying multinationals to meet empowerment obligations through alternatives to 30% ownership — such as investing in local suppliers,enterprise and skills development, job creation, infrastructure support, research and innovation, digital inclusion initiatives, and funding for SMMEs.
"Despite the legal standing of the ICT Sector Code under the BBBEE Act, ICASA's Ownership Regulations do not fully reflect its provisions — particularly regarding deemed ownership and EEIPs. Therefore, this policy direction aims to ensure consistency, unlock investment, and give practical effect to the ICT Sector Code in line with national development goals, including transformation," Moloto said.
