Elon Musk is embroiled in a war of words with President Cyril Ramaphosa. This week, Musk rightly pointed out the hypocrisy of the government’s claim that South Africa is a bastion of non-racialism while simultaneously enforcing a system of racialised economic preferencing. The exchange reveals that the president remains ideologically committed to race law in principle, despite its economically damaging consequences.

Shooting at Stars

Musk wants his satellite internet technology company, Starlink, to operate in South Africa. However, the South African government is refusing to let him invest here unless he cedes 30% of Starlink’s equity to a local (black) partner as part of its onerous broad-based black economic empowerment (B-BBEE) legislation.

In doing so, the South African government is putting its racial ideological agenda ahead of the material economic interests of its own population.

In many respects, South Africa is the ideal case for Starlink. While most of South Africa’s population now lives in urban centres – where broadband and mobile internet are highly concentrated – rural areas are less well connected by comparison.

Satellite internet would reach even the remotest corners of the country and enable "digital inclusion" for millions of South Africans, bringing much-needed access to communications tools and emerging artificial intelligence technologies. That these services will be critical for global competitiveness now and in the future is stating the obvious.

While Musk is keen to invest in South Africa, he also recognises the true nature of B-BBEE as a rent-seeking extractive machine that perpetuates racial classification. As Musk posted this week on X: “South Africa won’t allow Starlink to be licensed, even though I was BORN THERE, simply because I am not Black. We were offered many times the opportunity to bribe our way to a license by pretending that a Black guy runs Starlink SA, but I have refused to do so on principle.”

No Race Laws?

Speaking to reporters this week, President Ramaphosa insisted that South Africa’s laws were not racist but intended to empower people who were previously discriminated against and “redress the imbalances of the past”.

When asked about Musk’s views on B-BBEE, Ramaphosa said: “He will never find race-based laws in our laws; they are laws that are empowering all our people.”

The president added that many countries impose entry criteria as part of their licensing requirements and criticising B-BBEE laws “is, to me, quite dishonest, because if you look at our laws, you’ll find that they are empowering”.

In the same breath, the president argued that South Africa does not have any race laws, while also insisting that racial classification is necessary to address “historical injustices”. Either Ramaphosa is ignorant about his government’s explicitly racial policy agenda, or he is gaslighting the media about it.

The president argued that South Africa has a constitutional basis for its empowerment policies (in his mind, sections 9 and 217 of the highest law) but neglected to mention that this makes no reference to race.

He also conveniently forgot section 1 of the Constitution, which establishes non-racialism as a foundational value of the democratic state.

The Reality of Race Law

By declining to participate in the charade of B-BBEE, Musk is drawing much-needed attention to the moral duplicity of South Africa’s public policy framework, which claims to uphold non-racialism while also presiding over hundreds of Acts of Parliament with racial provisions.

Musk frequently cites the work of my colleague, Martin van Staden, who, in addition to being the head of policy at the Free Market Foundation (FMF), is also the compiler and editor of the Index of Race Law, a project of the Institute of Race Relations.

Van Staden has diligently catalogued the full panoply of race laws in South Africa, both before 1994 and after. His research shows that there have been 324 race laws adopted since 1910. Of these, 122 have been adopted since 1994. Of the 324 total laws, 145 remain on the books. And of the 145, 136 remain racial (the Index was last updated in June 2025).

Starlink already operates in more than 150 countries around the world. Musk’s net worth is purportedly $656 billion. The size of the South African market for Starlink would be negligible, so it is fair to say that South Africa needs this investment more than Musk does.

Musk is therefore being sincere when he says he is making a principled argument against racial discrimination of any kind. He should be applauded for doing so. Instead, he is met with disdain and derision by South Africa’s political elite, whose interests are intertwined with B-BBEE.

The Mirage of ‘Equivalence’

Ramaphosa also noted in his media interview that international companies that do not meet the ownership criteria can still comply with B-BBEE through other mechanisms such as skills training or enterprise development.

Some of these initiatives might be beneficial to those receiving the support, but that is beside the point. Investors are hardly lining up to commit capital to South Africa. The fact that there are any conditions at all should be cause for concern. 

Implicit in the concept of equivalence is a recognition that B-BBEE is in fact a barrier rather than an enabler of investment.

Moreover, equity equivalence is not an exemption; it is a discretionary policy action imposed at the whim of politicians. What can be granted can easily be taken away.

Ideological Posturing

Politicians like Rise Mzansi leader Songezo Zibi have cited “national security” concerns as justification for blocking Starlink’s entry to South Africa. This is a red herring. Our national security interests are already badly compromised, and not because of Elon Musk.

As the Madlanga Commission of Enquiry has shown, South Africa’s entire criminal justice system has potentially been hijacked by criminal syndicates. Naval exercises with the Islamic Republic of Iran are far more dangerous to South Africa’s national security interests than a commercial satellite internet company.

What this is really about is an antipathy towards the United States of America in general and the MAGA movement in particular. That Musk is MAGA-adjacent explains why he is being unfairly singled out by the likes of Ramaphosa and Zibi.

Instead of imposing extractive conditions on market entry the South African government should be doing its best to welcome firms like Starlink into the domestic market.

That the government is effectively blocking this vital investment speaks to the underlying motive for B-BBEE: elite enrichment rather than the genuine empowerment of poor South Africans who remain economically excluded by the government’s own policies.

Ansara is CEO of the Free Market Foundation.