If you needed a case study in political point-scoring trumping sober analysis, look no further than the ANC’s broadside on Saturday against communications minister Solly Malatsi’s policy directive on equity equivalent investment programmes (EEIPs).
The party’s statement – framed as a defence of transformation and parliamentary authority – comes off less like a defence of constitutionalism and the rule of law and more like an ideological reflex: if it has anything to do with black economic empowerment and isn’t enforced exactly the ANC’s way, it must be wrong.
This isn’t just quibbling over semantics. It risks chilling foreign investment, suppressing economic growth and leaving South Africans without access to critical digital infrastructure – in the name of preserving an orthodoxy that cannot, in the ANC’s view, ever be questioned.
Let’s recap what’s happened over the past couple of days: Malatsi on Friday issued a final policy directive to Icasa urging the communications regulator to align its ownership regulations with the ICT sector code, including provisions that allow EEIPs to be recognised as an alternative to the rigid 30% equity ownership requirement historically demanded of foreign telecommunications operators.
Under the current Icasa licensing regime – which is out of step with the ICT sector BEE code – any company seeking a telecommunications licence must ensure that 30% of its equity is held by historically disadvantaged persons.
Recognising EEIPs – essentially alternative transformation mechanisms such as investment in local suppliers, skills development and small business support – would align Icasa’s regulatory regime with the broader BEE framework already applied by the department of trade, industry & competition. These mechanisms are lawful and widely used across the economy by multinational firms seeking to satisfy empowerment expectations without forced dilution of equity.
Ideological tantrum
Yet the ANC’s reaction to Malatsi’s policy directive reads like a cry that the sky is falling. In short, it threw an ideological tantrum. In its statement, the party accused the minister, a senior member of the DA, of exceeding his authority, undermining transformation and threatening regulatory integrity.
It even urged parliament’s communications portfolio committee to hold Malatsi accountable for the “legality, intent and consequences” of his policy directive. That’s rich, given what President Cyril Ramaphosa himself has publicly said about the directive when it was in draft form: that it is lawful, consistent with existing policy goals and not aimed at dismantling BEE but at clarifying how BEE should be applied in the ICT sector.
Ramaphosa emphasised that EEIPs are valid transformation vehicles and that aligning them with Icasa’s approach helps remove legal inconsistency, not weaken empowerment. So, is the ANC now going to hold its own president to account?
Read: Political war erupts over BEE in the ICT sector
The ANC’s polemic assumes that any departure from a straight 30% equity ownership requirement is an existential threat to transformation. What hogwash!
This ideological posturing ignores that EEIPs are part of the BEE architecture – not an external invention. Companies such as Microsoft, Amazon Web Services and others already use equity equivalents to deliver meaningful empowerment outcomes in South Africa, including enterprise development funds, infrastructure spending and skills programmes. These do not involve selling equity but arguably produce greater, more durable impact than token shareholding arrangements.
Ironically, Malatsi’s directive doesn’t eliminate the BEE requirement. It simply broadens the mechanisms by which companies can meet their empowerment obligations – precisely the kind of flexible implementation that transformation critics inside and outside the ANC have long argued would unlock investment and growth.
And here’s the heart of the matter: the entire brouhaha has been conflated with Starlink, the satellite internet service owned by Elon Musk’s SpaceX. Starlink’s attempts to operate in South Africa have been tangled up in the country’s licensing regime because of Icasa’s 30% rule – and because the company has publicly criticised South Africa’s BEE laws as discriminatory. Musk’s sometimes incendiary remarks on the subject on his X platform have certainly not helped smooth already-ruffled feathers in the ANC.
It’s easy to get worked up about Musk – a figure who is culturally and politically polarising, who has backed far-right figures abroad and who makes opportunistic statements to suit his global PR strategy. But if that’s the basis for public policy, we are in trouble. Policy should be about outcomes, not personalities — whatever we might think of them.
And the outcome here is clear: aligning Icasa’s regulations with the broader BEE framework without dumping transformation goals outright would remove a barrier to investment that has stood for years and done nothing to advance South Africa’s economic fortunes. Malatsi is seeking to reform the system, yet the way the ANC carries on you’d think the minister had said he wants to tear down the entire system.
South Africa has not delivered real economic growth in a decade-and-a-half. Unemployment stubbornly remains among the highest in the world. Business confidence is weak. Foreign direct investment is lower than it should be for a middle-income economy with comparatively sophisticated infrastructure. And part of this economic malaise stems from a regulatory environment that scares off investors by signalling unpredictability and inflexibility. The very same regulatory environment the ANC is vigorously defending.
Archaic ownership rules that force companies to sell equity to local partners irrespective of economic logic or global corporate rules have been cited for years as obstacles to investment. In telecoms, this has been painfully obvious: potential entrants can see the size of the market and the infrastructure opportunities, but they are deterred by the requirement to dilute equity.
Icasa in the crosshairs
Icasa now finds itself in the crosshairs. The ANC has said the regulator should reject any directive that deviates from the old way of doing things – ignoring both the legal basis for EEIPs and the broader economic imperatives.
Here’s the absurdity: Ramaphosa, the leader of the ANC, has endorsed Malatsi’s move. Yet the party is publicly castigating it. In the middle sits Icasa, an independent but historically weak regulator, tasked with applying the law and managing the sector’s long-term development. It’s now caught up in a political battle in which it will be seen to be taking sides, no matter what it does.
Read: Icasa told to align on BEE in move that will favour Starlink
Proponents of BEE have long argued that its purpose is to correct historical injustices, expand participation in the economy and create sustainable opportunities for black people. But if BEE becomes an idol – something that can never be adapted or applied flexibly – then it stops serving its purpose and becomes a barrier to progress. And if that happens, calls for it to be scrapped in its entirety will grow.
The ANC’s attack on Malatsi’s reform agenda sends a clear message: BEE cannot ever be wrong; it cannot be questioned; it cannot be adapted. That’s why the party reacted with such zeal, ignoring the fact that EEIPs are lawful and widely used in practice. Malatsi hasn’t asked Icasa to abandon transformation. Rather, he is trying to make transformation work in a way that doesn’t cripple investment and hurt the economy.
The ANC’s weekend statement is a political stunt. Malatsi’s policy directive – aligned as it is with the broader BEE framework – deserves to be debated on its merits, not trashed for dogmatic ideological reasons.
If the ANC truly cares about transformation, it will embrace mechanisms that allow empowerment to be delivered in different ways without killing the investment that could accelerate inclusion and opportunity.
If the party truly cares about growth, it will stop reflexively opposing every change simply because it doesn’t fit its unyielding worldview, one that is out of sync with the need to build a modern, fast-growing economy. – © 2025 NewsCentral Media
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- The author, Duncan McLeod, is editor of TechCentral
