Government proposes equity-equivalent model to bypass Black-ownership laws and boost rural internet access as Ramaphosa prepares to meet Trump.
As tensions simmer between tech magnate Elon Musk and the South African government over Black Economic Empowerment (BEE) laws, a new Starlink deal may be on the horizon, strategically timed just before President Cyril Ramaphosa’s anticipated meeting with U.S. President Donald Trump.
South Africa is reportedly preparing to offer Musk and his Starlink satellite internet service a tailored solution to bypass traditional Black-ownership requirements, marking a potential policy pivot that could expand rural connectivity while softening diplomatic friction.
A Strategic Shift in Policy
According to insiders familiar with the high-level talks, South African officials travelling with President Ramaphosa will meet with Musk or his representatives on Tuesday night in a last-ditch effort to strike a deal. The proposed arrangement introduces an “equity-equivalent” model that would allow Starlink to operate in the country without adhering strictly to the current BEE regulations.
Instead of the mandatory 30% Black ownership that many ICT companies must comply with, Starlink could satisfy compliance through alternative means, such as infrastructure investment, skills training, or the distribution of Starlink kits to underserved rural communities.
This model isn’t exclusive to Musk; it reflects a broader policy reform in the ICT sector. The auto industry adopted a similar structure in 2019, with global carmakers like Toyota, BMW, and Ford investing in transformation funds.
The Diplomatic Undertones
While the deal could fast-track digital access in marginalised areas, it is also seen as a move to de-escalate tensions with both Musk and Trump. Both have publicly criticised South Africa’s BEE laws, with Musk branding them as “openly racist” and claiming he was barred from operating Starlink in his birth country due to his race.
The political context is equally charged. Trump has repeatedly amplified the unfounded narrative of a “White genocide” in South Africa, a claim rejected by local courts as baseless and imagined. Musk has echoed similar sentiments, fueling controversy around both internet policy and race relations.
According to sources, the goal is to neutralise these inflammatory claims before Ramaphosa steps into the White House, presenting a more investor-friendly and inclusive face of South Africa.
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A Game-Changer for Rural Connectivity
Starlink’s constellation of low-Earth orbit satellites offers fast, affordable internet even in the most remote corners of the globe. In South Africa, where just 1.7% of rural households had internet access as of 2023, the arrival of Starlink could be revolutionary.
The Department of Communications and Digital Technologies noted that the policy rethink isn’t about special treatment for one billionaire, but part of a broader effort to open South Africa to international digital investment and improve infrastructure nationwide.
“This is about creating an enabling environment,” the department emphasised in a public statement. “Starlink is one player in a much wider vision.”
Economic Implications and Market Response
The local currency responded positively to the news. The rand gained as much as 0.7% against the dollar, buoyed by investor optimism that a compromise with Musk could pave the way for a more stable and open trade relationship with the U.S.
Phoenix Kalen, head of emerging-market research at Societe Generale, commented:
“News regarding the Starlink workaround has boosted investor optimism ahead of the Ramaphosa-Trump meeting. It signals a more flexible and globally engaged South Africa.”
Political Pushback
Not everyone is on board. The Economic Freedom Fighters (EFF), South Africa’s radical leftist opposition, condemned the proposal. They labelled Starlink a “threat to local industry and national security,” accusing Musk of exploiting racial tensions to gain market access.
“The idea that he can peddle lies about genocide to pressure us into changing our laws is unacceptable,” the party stated.
What Lies Ahead
As South Africa navigates a complex landscape of racial justice, economic reform, and global diplomacy, the Starlink proposal may offer a glimpse into a more pragmatic future. One that balances historical redress with technological progress—and possibly, international goodwill.
Whether Musk signs on the dotted line or not, the government’s willingness to explore alternative models like equity equivalents could redefine the investment narrative for the country’s struggling ICT sector. The meeting with Trump will now take place under the shadow of this high-stakes digital diplomacy.
Also read: President Ramaphosa Arrives in Washington Ahead of White House Meeting With Donald Trump
