Elon Musk, the billionaire entrepreneur behind SpaceX and Tesla, recently stirred up a heated debate after claiming that South African authorities rejected his satellite internet service, Starlink, because of his race.
Musk, who was born in Pretoria but now resides in the United States, took to social media to criticize what he called “racist laws” preventing Starlink from operating in the country.
His statement quickly went viral, drawing both support and backlash.
Many South Africans accused him of spreading misinformation, while government officials were quick to clarify the actual reasons behind Starlink’s rejection.
South African Government Responds to Musk’s Accusation
Clayson Monyela, South Africa’s Head of Public Diplomacy, wasted no time in countering Musk’s claims.
In a direct response on social media, Monyela wrote, “Sir, that’s NOT true, and you know it! It’s got nothing to do with your skin colour.”
Monyela emphasized that Starlink is welcome to operate in South Africa, provided it complies with local laws—specifically, the country’s Black Economic Empowerment (BEE) regulations.
These laws require foreign companies to allocate at least 30% of their local operations to historically disadvantaged groups.
He further pointed out that more than 600 U.S. companies are successfully operating in South Africa under these same regulations, disproving Musk’s claim of racial discrimination.
The Real Reason Behind Starlink’s Struggles in South Africa
At the heart of this issue is South Africa’s commitment to economic transformation.
The BEE policy is designed to promote greater inclusion in business and ensure that historically marginalized communities benefit from economic opportunities.
Starlink’s parent company, SpaceX, had previously attempted to negotiate an exemption from these rules.
However, after failing to reach an agreement with South African authorities, SpaceX ultimately withdrew its proposal to operate Starlink in the country.
Microsoft Finds Success Where Starlink Struggled
Monyela pointed to Microsoft as an example of a foreign company that successfully navigated South Africa’s investment landscape.
Unlike SpaceX, Microsoft complied with BEE laws and recently announced a massive R5 billion investment to expand cloud and artificial intelligence infrastructure in the country.
The tech giant also set up South Africa’s first data centers in Johannesburg and Cape Town, ensuring that local businesses and government entities can benefit from advanced digital solutions.
This stands in stark contrast to Starlink’s approach, where instead of adapting to the country’s legal framework, Musk opted to publicly criticize it.
South Africa’s Investment Climate Remains Strong
Despite Musk’s claims, South Africa continues to attract significant international investment.
Since 2018, the country has secured over R1.14 trillion in investment commitments across various sectors, including mining, manufacturing, agriculture, and the digital economy.
The government remains open to foreign businesses but insists on compliance with local laws to ensure fair economic participation for all citizens.
Is Musk Spreading Misinformation?
Elon Musk’s statement has reignited debates about South Africa’s economic policies and whether they are fair or restrictive to foreign investors.
While some argue that regulations like BEE make it difficult for businesses to enter the market, others believe these policies are necessary to correct historical economic imbalances.