[Image: X/@elonmusk]
Well, it looks like President Cyril Ramaphosa isn’t exactly rolling out the red carpet for Elon Musk and his Starlink satellite internet.
Musk—never one to keep things subtle—recently took to his platform X to question what he called “openly racist laws” in SA. He’s likely referring to the Expropriation Act and Black Economic Empowerment (BEE) regulations, which require companies like his to have at least 30% black ownership. Shame.
Why do you have openly racist ownership laws? https://t.co/tHWVsmB04F
— Elon Musk (@elonmusk) February 3, 2025
Speaking to Bloomberg, President Cyril Ramaphosa’s spokesperson, Vincent Magwenya, hinted that SpaceX’s Starlink proposal for South Africa might be dead in the water.
The licensing talks between SpaceX and South Africa have been dragging on for ages. One major reason is the ongoing tensions between SA and Donald Trump’s old administration in the US. According to a Bloomberg report (paywall alert), negotiators are basically saying, Let’s put a pin in this until the political climate cools down.
For a while now, SpaceX—owned by Musk, basically Trump’s second in command at this stage—has been trying to get the green light to operate in South Africa. But here’s the sticking point: SpaceX asked to work around the 30% local ownership rule by instead investing in initiatives that support BEE. It’s an approach that’s been accepted in other sectors, but here? Not so much.
Last year, communications minister Solly Malatsi nudged Icasa (the communications regulator) to consider allowing these “equity equivalent” alternatives. His argument was that if you make it too hard for foreign investors to enter the market, they’ll simply take their money elsewhere. And to be fair, he insists this isn’t about Starlink specifically—it’s about making SA a more attractive place for foreign direct investment in general.
Just when things were heating up, SpaceX pulled out of Icasa’s public hearings this month at the last minute. It turns out Musk’s online pot-stirring probably didn’t help. After his pointed tweet at Ramaphosa, things got even frostier, with Magwenya making it clear that South Africa isn’t about to bend over backwards for Musk.
“If a leading business figure like Elon Musk harbours the kind of unprogressive, racist views that we’ve witnessed and the peddling of lies that we’ve been confronted with, then we’re not going to pursue having his investments,” Magwenya reportedly said.
Ouch.
Meanwhile, SpaceX’s official stance—per its written submission to Icasa—is that the strict 30% local shareholding rule is effectively locking out major foreign satellite operators. Their argument is that if regulators aligned SA’s licensing laws with the ICT sector code (which already allows for equity equivalent investments), it would be a win-win. More foreign investment, more innovation, more competition, and overall industry growth.
“Many foreign satellite operators, particularly those with direct-to-consumer business models, have global policies that prevent local shareholding, thus excluding them from the South African market. This holds true even when these operators are willing to comply with B-BBEE requirements and invest in initiatives that directly benefit the target communities,” the submission said, referencing the empowerment rules in the licensing process.
“By aligning the licensing and ownership regulations with the ICT sector code – which recognises equity equivalent programmes as an alternative to local shareholding – Icasa could remove a significant barrier to foreign satellite operators. This would not only increase foreign investment in South Africa but would also create broader industry benefits, supporting innovation, competition and long-term growth,” SpaceX said.
So, what’s next? For now, the Starlink-SA standoff continues.
Will Musk get his way, or is he about to add South Africa to his ever-growing list of places that just won’t play ball?
[Source: TechCentral]
