‘Transformation is not a favour, it's a necessity,' Says Ramaphosa as Starlink fight heats up
President Cyril Ramaphosa, reiterating government's stance on economic transformation policies despite huge backlash from opposition parties.
Image: ANC/X
President Cyril Ramaphosa has once again defended South Africa's Broad-Based Black Economic Empowerment (B-BBEE) Act and the Employment Equity Act, saying the country must reject the 'false notion' that it must choose between economic growth and transformation.
Ramaphosa's remarks, made in his weekly newsletter on Monday, after weeks of controversy over a policy proposal by Communications and Digital Technology Minister Solly Malatsi to ease B-BBEE requirements for satellite communication services such as Elon Musk's Starlink.
The proposal sparked backlash from opposition parties, including the Economic Freedom Fighters (EFF) and the uMkhonto weSizwe (MK) Party, which argued that it would allow foreign companies to bypass empowerment laws.
EFF described the proposal as a 'backdoor for foreign multinationals' to exploit Equity Equivalent Investment Programmes (EEIPs) to sidestep B-BBEE compliance.
The MK Party called it a 'treacherous blueprint' to dismantle state capacity and strike deals with foreign tech oligarchs.
Despite this, Ramaphosa stood by the policy, arguing that B-BBEE is not just a policy preference but a constitutional imperative.
He invoked the 70th anniversary of the Freedom Charter, which proclaimed that 'the people shall share in the country's wealth.'
'Our Constitution reflects the promise we made to one another and to future generations to redress the injustices of our past and realise the full potential of our country,' Ramaphosa wrote.
'For this reason, we reaffirm that broad-based black economic empowerment is not just a policy choice but a constitutional imperative.'
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Ramaphosa said the world is currently in a 'polycrisis,' characterised by global conflict, economic stagnation, mistrust in institutions and environmental degradation, challenges that South Africa is not immune to.
He argued that this is not the time to backtrack on empowerment but to double down.
'We must make our empowerment policies more meaningful,' Ramaphosa said.
'Economic growth without transformation entrenches exclusion, and transformation without growth is unsustainable.'
He emphasised that South Africa has made measurable progress since 1994 through a 'robust legislative framework' anchored by the B-BBEE Act and the Employment Equity Act.
'We have seen real changes in ownership patterns, including more businesses owned by women. We have seen changes in management control, enterprise development and skills development,' he wrote.
According to Statistics South Africa, between 2006 and 2023, real household income increased by 46% for black Africans, 29% for coloured households, and 19% for Indian households.
However, Ramaphosa acknowledged that, on average, white households still earn nearly five times more than black African households.
'This is the gulf we must close through deliberate and sustained efforts to expand opportunity,' he said.
'Transformation is not a favor, it is a necessity.'
Ramaphosa criticised those who continue to benefit from historical privilege while challenging B-BBEE in the courts, calling for national unity on the issue.
'We must dispense with the false notion that we must choose between growth and transformation,' he said.
'B-BBEE is not a cost to the economy; it is an investment in it.'
He said this commitment underpins government programs like the Black Industrialists Programme and the newly established Transformation Fund, aimed at supporting innovative black-owned enterprises.
'There is a critical need for black-owned businesses to access funding on affordable terms,' he said.
He called on private banks to review their lending practices.
'They have the resources to make the greatest impact.'
Ramaphosa said the Public Procurement Act must be used to expand opportunities for businesses owned by women, youth and persons with disabilities.
'Transformation must reach into every sector, whether it is mining, construction, energy, IT or agriculture,' he said.
'The private sector should use their supply chains far more deliberately to empower more black-owned businesses, not just to improve their B-BBEE scorecard, but to grow and diversify their supplier base.'
As the country develops infrastructure, green industries and localized manufacturing, transformation must remain central, he added.
'The transformation we seek is not about ticking boxes. It is about building a resilient, just economy for generations to come,' he wrote in the newsletter.
'I call on all South Africans, and in particular the private sector, to recommit to economic transformation.'
Meanwhile, Starlink, owned by Musk's SpaceX, does not currently hold an operating license in South Africa.
Its efforts to obtain one reportedly failed after Musk rejected the requirement that foreign telecommunications companies sell a 30% stake to historically disadvantaged South Africans in order to operate.
In February, US President Donald Trump signed an executive order aimed at isolating South Africa, citing allegations of anti-white policies and accusing the government of harboring hostility toward the US and its allies, including Israel.
This action was widely viewed as part of Musk's pushback against South Africa's empowerment regulations.
In response, Ramaphosa led a delegation to Washington on May 21 in an attempt to salvage key trade agreements and attract new investment amid the diplomatic tension.
simon.majadibodu@iol.co.za
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