SA under fire for proposed law change: South Africa’s attempt to weaken the laws governing Black ownership has been criticized by the opposition as a “backroom deal.”
In an attempt to reassure South Africans that this was not a backdoor deal, the opposition Build One South Africa (Bosa) party said it wrote to the Speaker of Parliament this week, requesting a “public record of decision in this matter.”
Nobuntu Hlazo-Webster, deputy leader of Bosa, stated, “The message is that if you are a powerful foreign billionaire, you can sidestep South Africa’s laws, while our local businesses are forced to jump through hoops.”
The party spokesperson, Roger Solomons, termed the recently gazetted carve-out for telecoms corporations a “impulsive move” that allowed Starlink to enter the South African market “under conditions favorable to them, and not the country.”
Major opposition party leader Julius Malema of the extreme left-wing Economic Freedom Fighters declared he would “oppose Starlink in parliament” instead of being “dictated to by business.”
There has been a backlash since last week, when Communications Minister Solly Malatsi suggested new rules that would exempt telecom corporations from having to sell 30% of their local entity’s shares to historically underrepresented groups in order to obtain operating licenses.
Companies might instead fund “equity equivalency programs,” which include supporting small firms, hiring local suppliers, or creating specific jobs.
In order to comply with current regulations, other foreign telecom companies operating in the nation, including Vodafone’s local division, Vodacom, have sold shares in local subsidiaries to Black investors.
To address apartheid regulations that excluded the Black majority from economic possibilities for decades, the long-ruling African National Congress has made affirmative action laws its guiding principle.
Critics argue that the rules often serve as a compliance exercise, discouraging investment and only benefiting a new Black privileged class.
Calls for comparable exemptions in mining have surged in tandem with the relaxation of Black ownership rules in telecoms. Under a proposed mining bill, the primary mining organization, the Minerals Council South Africa, stated that exploratory firms should not be subject to Black ownership criteria.
The bill’s current version would make it mandatory for Black South Africans to own 30% of a group’s shares, which is already required by a sectoral charter.
“Prospecting is a very risky endeavour. Allan Seccombe, director of communications for the Minerals Council, stated that there is no assurance that they will discover something that is profitable.
“Ideally, every cent raised should be used to drill out or locate a resource.”
The second-largest party in the ruling coalition, the Democratic Alliance, is suing the ANC for its BEE ownership restrictions, claiming they violate the constitution.
According to DA MP James Lorimer, the draft mining bill’s proposed Black ownership requirements “will effectively end the already tottering case for foreign investment in South African mining,” among other things.
“The bill, which aims to intensify racial transformation, brings back a plethora of negative ideas.”
On numerous occasions, President Cyril Ramaphosa has rejected the notion that BEE legislation ought to be repealed or changed.
“We still have this idea that BEE is the one holding back our economy, and I find that really concerning,” he stated in parliament this week.
“What is preventing our economy from expanding is the partial and exclusive ownership of the means of production in our nation.”
