Presidency says South Africa does not want Elon Musk

South Africa will not pursue investments from Elon Musk, with the Presidency accusing the world’s richest man of harbouring unprogressive and racist views. This is according to a statement from Presidency spokesperson Vincent Magwenya to Bloomberg.

“If a leading business figure like Elon Musk harbours the kind of unprogressive, racist views that we’ve witnessed and the peddling of lies that we’ve been confronted with, then we’re not going to pursue having his investments,” Magwenya said.

Bloomberg reported that the spat between South Africa and the United States government, where Musk is now considered a senior figure, has had a chilling effect on negotiations to launch Starlink locally.

Starlink is owned and operated by SpaceX, the South African-born entrepreneur’s space technology company.

The latest salvo from South Africa comes after Musk asked President Cyril Ramaphosa on Twitter/X why South Africa has openly racist ownership laws.

Musk’s post quoted a recent statement from President Cyril Ramaphosa stating that misgivings about the Expropriation Act he recently signed into law were based on misinformation.

Ramaphosa assured that the new law was not a confiscation instrument but a constitutionally mandated legal process that ensures public access to land in an equitable and just manner.

“We look forward to engaging with the Trump administration over our land reform policy and issues of bilateral interest,” Ramaphosa said.

“We are certain that out of those engagements, we will share a better and common understanding over these matters.”

Ramaphosa issued the statement after Trump posted on Truth Social that the U.S. would halt foreign aid to South Africa because the country was “confiscating land, and treating certain classes of people very badly.”

Trump’s warning about halting aid to South Africa came after various groups raised concerns over the Act’s inclusion and handling of expropriation without compensation.

In particular, the Act lists four examples where “nil compensation” might be appropriate, but also states that it was not limited to these specific scenarios so long as it was in the “public interest”.

Additionally, one of the scenarios explains that land could be expropriated without compensation if someone purchases it purely as an investment and leaves it vacant and undeveloped.

Although Trump initially said his action against South Africa was due to expropriation without compensation, the executive order he signed four days later, on 7 February, tells a slightly different story.

While the order does direct U.S. government agencies to halt foreign aid to South Africa wherever legally possible and paves the way to grant refugee status to Afrikaners, the Expropriation Act is not the only justification provided.

The executive order begins by alleging that the Expropriation Act enabled the South African government to seize ethnic minority Afrikaners’ agricultural property without compensation.

“This Act follows countless government policies designed to dismantle equal opportunity in employment, education, and business, and hateful rhetoric and government actions fueling disproportionate violence against racially disfavored landowners.”

It then continues by taking aim at South Africa’s foreign policy, particularly as it relates to Israel and Iran.

“In addition, South Africa has taken aggressive positions towards the United States and its allies, including accusing Israel, not Hamas, of genocide in the International Court of Justice, and reinvigorating its relations with Iran to develop commercial, military, and nuclear arrangements,” the order states.

“The United States cannot support the government of South Africa’s commission of rights violations in its country or its undermining United States foreign policy, which poses national security threats to our Nation, our allies, our African partners, and our interests.”

South Africa brought the case against Israel on 29 December 2023, accusing the country of committing genocide against Palestinians in the Gaza Strip.

This came after Hamas and several other Palestinian militant groups launched an attack from the Gaza Strip into the Gaza Envelope of southern Israel on 7 October 2023.

Bloomberg reported that Starlink negotiators have backed off on talks with South Africa following the public quarrel between Ramaphosa, and Musk and Trump.

While Ramaphosa is eager to attract as much foreign investment as possible, Magwenya said the South African government would not allow it at the expense of the country’s constitution and values.

According to Statistics South Africa’s latest general household survey, only 1.7% of rural households have access to the Internet.

As a result, thousands of households and businesses in underserviced areas are already using Starlink, even though it is technically operating in the country illegally.

Starlink does not have the necessary infrastructure, service, or spectrum licences to operate in South Africa.

Regulations enacted by the Independent Communications Authority of South Africa (Icasa) stipulate that national Internet and infrastructure providers must be 30% owned by historically disadvantaged groups (HDGs).

This includes black people, youth, women, and people with disabilities.

SpaceX’s only options for launching in South Africa are to work through a local middleman or sell a 30% stake in a local entity to an HDG shareholder.

However, the latter option is further complicated by the fact that Icasa has new regulations on the books that would change the local ownership requirements from 30% HDG-owned to 30% black-owned.

Icasa can enact the new regulations at any time. Despite industry concerns, it has failed to give any certainty about whether it would follow through with the regulations or withdraw them.

To provide an alternative path for multinational companies to comply, communications minister Solly Malatsi previously said he would direct Icasa to implement equity equivalent programmes for the telecommunications sector.

SpaceX has supported this idea, saying that other sector regulators allow this as it aligns with the Department of Trade, Industry, and Competition’s guidelines for Broad-Based Black Economic Empowerment.

“This would not only increase foreign investment in South Africa but would also create broader industry benefits, supporting innovation, competition, and long-term growth,” SpaceX stated.