History is a great teacher, and those who ignore it are doomed.
Would South Africa be creating new “Elon Musk regulations” if it exempts Starlink from Broad-Based Black Economic Empowerment (B-BBEE) compliance?
The answer lies in understanding how US giants like IBM, Microsoft, and Amazon already comply: through Equity Equivalent Programmes (EEPs).
What is B-BBEE and Why Do Multinationals Use Equity Equivalents?
South Africa’s B-BBEE Act of 2003 aims to redress apartheid-era economic disparities by promoting black ownership, skills development, and enterprise growth.
However, foreign companies often cannot transfer direct ownership.
Instead, they leverage Equity Equivalent Programmes – approved by the Department of Trade, Industry, and Competition (DTIC) – to earn B-BBEE points.
How Does It Work?
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Alternative to Ownership: Instead of selling equity, firms invest in skills development, SMME growth and infrastructure.
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Government Approval: Programmes must align with national policies (NDP, Industrial Policy) and be approved by the Minister.
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25 B-BBEE Points: Companies earn full ownership points for approved initiatives.
Case Studies: Microsoft, IBM, and Amazon
Microsoft’s R1.32 Billion Investment (2024)
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Focus: Black-owned SMMEs, 4IR skills, and R&D.
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Impact: Supports tech and non-tech enterprises over 10 years.
IBM’s R700 Million Skills Development (2015)
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Focus: Training small business owners in digital skills.
Amazon Web Services (AWS) EEIP (2019)
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Focus: Accelerating 100% black-owned IT businesses.
Could Starlink Use an Equity Equivalent?
If South Africa permits Starlink to operate via an EEP, it would not be a new law – just an application of existing B-BBEE mechanisms used by other US firms.
Key Benefits of Equity Equivalents:
- No equity dilution for multinationals.
- Boosts local SMMEs and skills development.
- Aligns with South Africa’s economic goals.
Equity equivalents are a proven B-BBEE compliance tool for global companies. If Starlink follows the path of Amazon, IBM, and Microsoft, South Africa wouldn’t be making exceptions—just enforcing existing policy.
Herewith below EEP outlined by Department of Trade and Industry in a 2022 Presentation:
