The Government of National Unity (GNU) is facing fresh challenges following a controversial policy directive issued by Minister of Communications and Digital Technologies, Solly Malatsi. 

The Government Gazette, issued on 12 December, is widely seen as an attempt to clear the path for Elon Musk’s Starlink to operate in the country by bypassing the strict 30% Historically Disadvantaged Groups (HDG) ownership requirements and replacing them with a less stringent “equity equivalent” model.

The policy has drawn immediate condemnation from the ANC, the EFF, and Rise Mzansi, who accuse Malatsi of executive overreach, undermining the nation’s transformation framework, and selling out South Africa’s digital sovereignty to foreign interests.

The issue that pits the DA’s pro-business, deregulation stance against the ANC’s commitment to Black Economic Empowerment (BEE) and national security. Malatsi is a senior DA member.

The directive allows foreign satellite network operators, like Starlink, to substitute Black equity ownership with “equity equivalent” investment programmes, such as investments in digital infrastructure. 

Malatsi argues this “reinforces the need for regulatory parity,” will “attract more investment,” and help expand high-speed internet access to underserved communities.

However, his political partners and rivals are not convinced.

ANC spokesperson Mahlengi Bhengu through a statement expressed “deep concern,” framing the Gazette as an unlawful executive maneuver. 

The party stresses that no Minister had the authority to “amend or suspend legislation via a policy directive”.

This, they argue, is a direct assault on South Africa’s democracy, mirroring “a troubling trend where Ministers belonging to the Democratic Alliance seek to bypass Parliament”.

Furthermore, the ANC views the policy as unlawfully directing the Independent Communications Authority of South Africa (ICASA) to act beyond its statutory mandate, thereby destabilising the independent regulator. 

The party has called on Parliament to urgently hold Malatsi accountable and urged ICASA to refuse to implement any directive inconsistent with the law.

The EFF accused Malatsi of attempting to “subvert South African laws” in an “obvious attempt to avoid the Parliament”.

The party views the “equity equivalents” as “less transformative substitutes” that could be replaced by “mere donations of Musk’s infrastructure as he deems fit”.

Beyond the BEE concerns, the EFF raised the national security alarm, citing the unpredictability and “hostility” of Elon Musk towards South Africa. 

“For an unrepentant racist and megalomaniac like Elon Musk to enter the telecommunications market in South Africa, granting him possible control of infrastructure in the long term, is irresponsible,” the party said at the weekend.

 The EFF warned Malatsi that if he had made guarantees to Musk to secure funding or support, they would pursue all mechanisms “in Parliament, in the courts, and on the streets to ensure that his illegal directives are not implemented”.

Another GNU partner Rise Mzansi’s leader Songezo Zibi warned of the broader geopolitical and security risks associated with the offer made to Musk. 

Zibi labelled Musk as a “huge security risk,” citing his past threats to cut Starlink access to critical users like the Ukrainian military. “We can’t have that Starlink thing here,” Zibi stated, advocating for national security and digital sovereignty above all else.

Chairperson of the Portfolio Committee on Communications and Digital Technologies Khusela Sangoni Diko on Saturday said Malatsi’s “policy directives are an affront to the centuries old fight for equity and redress by the black majority in this country”.

DA spokesperson Karabo Khakhau did not respond to questions sent to her on Sunday, however the party in a statement, described the ANC’s reaction to Malatsi’s directive as “political expediency”.

“While the interaction between legislation and regulation can be complex, the ANC has governed since 1994 and was the architect of South Africa’s current empowerment framework. It is therefore deeply concerning that the party now promotes what can only be a wilful misreading of that legal framework.

“Section 10 of the B-BBEE Act requires all organs of state to take the B-BBEE Codes of Good Practice into account when setting criteria for licences and other authorisations. ICASA, despite its independence, is an organ of state and is bound by this provision,” the DA said.

The party said the Act explicitly refers to licensing and the Codes “also recognise Equity Equivalence Investment Programmes (EEIPs) as a lawful mechanism for international companies that cannot sell shares locally, a point reaffirmed by President Ramaphosa in his 30 June newsletter”.

“ICASA’s reluctance to apply these provisions runs contrary to the rule of law.

“It must therefore be emphasised that the Minister’s policy direction does not allow anyone to bypass empowerment or transformation requirements. Instead, it seeks to prevent international companies from being excluded altogether in cases where local ownership is not feasible.”

Malatsi’s spokesperson Kwena Moloto said that the policy direction aims to address the regulatory inconsistencies resulting from the Limitation on Control and Ownership Regulations that ICASA adopted in 2021 and then amended in 2022.

“These Regulations refer to the Broad-Based Black Economic Empowerment Act (the BBBEE Act) and the ICT Sector Code but only certain provisions from these two legal texts have been adopted by the sector regulator, ICASA.

“Different sectors of the economy (like agriculture, finance, mining and telecommunications and broadcasting) have their respective sector codes that set out how each sector will comply with the BBBEE Act.

“Instead of selling equity stakes, companies can earn full ownership scorecard points by investing in initiatives such as skills development programmes, enterprise and supplier development, and critical infrastructure investments,” Moloto said.

He said that Malatsi did not invent this mechanism as it was a long-standing regulatory tool approved and used by previous administrations through the DTIC.

“Nothing could be further from the truth. Both the Electronic Communications Act and ICASA Act clearly set out the powers of ICASA, as the sector regulatory authority, and the Minister of Communications and Digital Technologies,” Moloto said.

 mashudu.sadike@inl.co.za

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