A Quiet Change with Big Impact
In a little-noticed government gazette article, the South African Department of Communications and Digital Technologies proposed relaxing Black Economic Empowerment (BEE) rules for satellite service providers, most notably Elon Musk’s Starlink. It’s a minor technical change with enormous legal and political implications.
For the first time, the government has established a clear precedent: certain companies, particularly foreign tech firms, can be exempt from the racial ownership requirements that all South African companies are expected to follow. This selective application is not just a policy shift. It is a legal doorway, one that South African companies could now walk through to challenge the very foundations of BEE.
Equality Before the Law
South Africa’s Constitution guarantees equality before the law. Section 9, known as the Equality Clause, promises that “everyone is equal before the law and has the right to equal protection and benefit of the law.” While it makes allowance for affirmative action to redress historical injustices, it does not justify permanently disadvantaging one group while excusing another from the same rules.
By granting Starlink a potential exemption, the government has tacitly admitted that BEE is not a fixed requirement for national development, that it can be bypassed if the stakes are high enough. This presents a strong legal argument that BEE can no longer be applied universally, thereby opening the door to legal challenges across all sectors.
Starlink Changes the Game
Starlink had previously been denied a license to operate in South Africa under Section 9(2)(b) of the Electronic Communications Act, which requires 30% black ownership for telecom service providers. However, last week, Communications Minister Solly Malatsi proposed a new policy direction that would allow companies like Starlink to operate based on the economic value they add, rather than their racial ownership structure.
According to the department’s proposal, universal internet access has become so vital to public welfare that it now outweighs existing racial equity provisions. The proposal cites World Bank data showing that a 10% increase in broadband participation could boost South Africa’s GDP by 1.2%. The department frames this as one of the most extensive empowerment programs in the country’s history, ironically, by bypassing the very empowerment laws that have dominated South Africa for the past two decades.
Why the Sudden Shift?
One reason is likely international pressure and embarrassment. In a recent visit to the White House, South Africa’s delegation faced heavy criticism, especially after global media highlighted Julius Malema’s inflammatory rhetoric against white people. Elon Musk, also present at the event, reportedly challenged President Ramaphosa directly over the ban on Starlink. Days later, the policy proposal was published.
Musk has openly criticized South Africa’s racial laws, calling them “racist” and citing over 140 regulations that discriminate against white South Africans. Whether through coincidence or consequence, his intervention appears to have accelerated the reconsideration of policy.
The Numbers Tell the Story
A 2024 report by the South African Institute of Race Relations estimated that BEE policies are costing the economy approximately R150 billion annually, equivalent to over 2% of the country’s GDP. The World Bank has independently confirmed the potential economic gains of removing internet access barriers. Now, the government department is citing this data to justify relaxing BEE in the ICT sector.
The logical conclusion is clear: BEE has become a barrier to growth. Its continuation hinders overall economic development, confirming that it is no longer economically or legally defensible on a national scale. By recognizing this, the government has, perhaps unintentionally, strengthened the case for dismantling or fundamentally rethinking the system, an opportunity for those who advocate for merit-based empowerment over race-based regulation.
A Door Opens for Reform
South African companies now have a tangible opportunity to push back. If equality before the law still means anything, the same rules must apply to all. And if the government cannot justify why some companies are exempt from BEE while others suffer under it, then it may be time to reconsider or even strike down the policy altogether.
This policy shift may seem like a minor bureaucratic adjustment, but it carries the weight of a significant legal milestone. It suggests that BEE is not untouchable, and it offers South Africans a rare opportunity to reassert the values of fairness, merit, and economic freedom. Whether this moment sparks real change will depend on whether South Africa’s business leaders, legal minds, and citizens seize the opportunity or let it slip away.
