The African National Congress (ANC) has launched a sharp critique of Telecommunications Minister Solly Malatsi’s new policy directive, which relaxes ownership rules for foreign telecommunications companies, notably SpaceX’s Starlink. The directive would permit such firms to operate in South Africa without meeting the standard requirement of 30% local black ownership.
In a strongly worded statement, the ANC asserted that any alteration to Broad-Based Black Economic Empowerment (B-BBEE) legislation must undergo a full parliamentary process and cannot be achieved through a ministerial directive alone. The party warned that the move risks reversing hard-won economic transformation gains and fostering foreign dominance in a key sector.
The ANC has called on Parliament to hold Minister Malatsi accountable and has urged the Independent Communications Authority of South Africa (ICASA) to reject any directive it deems inconsistent with existing law.
Responding to the growing backlash in an interview, Minister Malatsi defended his actions, framing them as a lawful and necessary harmonization of regulations.
“Policy directions are legal instrument which are available to whoever is the minister of communications in advancing national laws,” Malatsi stated. He argued that the core issue is aligning telecommunications sector regulations with broader B-BBEE rules, specifically provisions in the B-BBEE Act and ICT sector codes that allow for “equity equivalent investment programs.”
These programs, Malatsi explained, provide an alternative entry pathway for multinational companies that, due to their ownership structures or other factors, may not wish to cede 30% equity. He cited examples like Microsoft and IBM operating in South Africa through such mechanisms.
“The idea that we are seeking to amend legislation is incorrect,” Malatsi said, dismissing the ANC’s criticism as “a very expedient misinterpretation” driven by ideological differences. He suggested the controversy stemmed from political opponents disliking the decision-maker or the policy direction, not its legality.
The Minister detailed a public consultation process he said followed the law, beginning with an intention statement late last year. He claimed the subsequent draft policy directive received 19,000 responses, with 90% in favor after accounting for duplicate submissions. He also noted he had already appeared before Parliament’s portfolio committee to discuss the draft.
Addressing accusations that he was circumventing Parliament, Malatsi was firm: “It’s a very populist propaganda because it is not the truth.” He emphasized that the final authority to grant licenses rests with ICASA, which must merely “consider” his policy directive.
“The law says that the minister may issue policy directives that ICASA may consider. ICASA can make its own decision,” he stated, adding that it was his critics who were attempting to coercively align the regulator with their ideology.
When challenged on whether the directive undermines the core transformation objective of ownership by historically disadvantaged groups, Malatsi insisted it did not.
“We are saying that both options should permanently be on the table,” he clarified, referring to the 30% ownership rule and the equity equivalent program. “It’s not saying one over the other.”
The Minister also vehemently denied allegations from the Economic Freedom Fighters (EFF) that he had received funding from Starlink, calling the claim “absolute rubbish” and challenging accusers to provide evidence.
Despite Malatsi’s robust defense, the ANC maintains that the move is procedurally flawed and substantively damaging. The party’s call for parliamentary oversight and ICASA’s rejection of the directive sets the stage for a potential legal and political confrontation within the Government of National Unity, highlighting a significant rift over economic policy and transformation priorities.
