South Africa’s government is planning to offer Elon Musk an alternative solution to local Black-ownership laws to enable his Starlink internet service to operate in the country. The aim is to ease tensions with both the billionaire and US President Donald Trump ahead of an important state visit by the South African president to the White House.
What the Starlink Offer in South Africa Includes
According to three sources familiar with the negotiations, the offer will be presented at a meeting scheduled for Tuesday evening between Musk or his representatives and a delegation of South African officials accompanying President Cyril Ramaphosa. The goal is to defuse the wave of criticism from Musk and Trump, who have spread conspiracy theories about alleged persecution of the white population in Africa’s most industrialized nation. The rand (South African currency) strengthened by up to 0.7% against the dollar in response to this news and traded 0.5% stronger at 18 rand per dollar.
Alternative Solution for Technology Companies
The alternative to the so-called Black Economic Empowerment (BEE) laws, which in some cases require 30% Black ownership, is not specific only to Starlink and Musk. According to informed sources, this solution would be applied to all information and communication technology companies, including those from China and the Middle East.
The so-called “equivalent alternative” would instead include:
- Infrastructure investments to improve digital connectivity
- Funding for educational and training programs in ICT
- Providing Starlink equipment to rural areas to improve internet access
- Creating a fund to support digital inclusion of disadvantaged communities
A similar model has already been used by the automotive industry in 2019, when major car manufacturers – including BMW AG, Ford Motor Co., and Toyota Motor Corp. – established a fund to invest in integrating disadvantaged groups into the sector.
Historical Context and Current Situation
South Africa introduced BEE rules after the end of apartheid, during which Black people were subjugated and excluded from the formal economy by the ruling white minority. Today, white people earn on average five times more than Black citizens according to official statistics and own the majority of agricultural land, despite making up only 7% of the population.
Key factors influencing the current Starlink debate in South Africa:
- Musk, born in Pretoria, publicly claimed he cannot operate his service in South Africa “because I’m not Black”
- Trump granted refugee status to minorities from South Africa and repeatedly spread false claims about a “white genocide”
- A South African court in February officially ruled that there is no evidence supporting these claims
- The government’s law on potential expropriation is similar to US laws, but allows expropriation without compensation in certain specific cases
- According to official statistics, about 12% of households live in informal settlements on private or state land
Potential Benefits of Starlink Technology
South Africa’s Department of Communications and Digital Technologies stated that the new rules for ICT firms are not about “providing access to a single company, but rather part of a broader strategy to create an enabling environment for international investment and expand digital connectivity across South Africa.” They form part of the government’s “medium-term plans.”
Starlink’s technology, which relies on a constellation of low-Earth orbit satellites, could be a game-changer for South African users who have historically faced expensive or unreliable internet options. According to a survey by the local statistics agency from 2023, only 1.7% of rural households have internet access.
South Africa’s talks with Musk about Starlink won’t necessarily be part of a proposed larger trade deal with the US, but gaining the support of the influential entrepreneur could contribute to more positive relations between the two countries ahead of President Ramaphosa’s Wednesday visit to the White House.
