The South African government is reportedly considering ways to allow Elon Musk’s companies to invest in the country without fully complying with Black Economic Empowerment (BEE) regulations, according to sources cited by Semafor. Under current rules, at least 30% of any South African operations of Musk-owned businesses, such as Tesla or SpaceX, would need to be sold or donated to Black South Africans.
South Africa's land act targets a stark divide, Trump and Musk oppose it https://t.co/wN8I6enUti pic.twitter.com/mg9CsHPSms
— Reuters Africa (@ReutersAfrica) February 10, 2025
However, officials have explored an alternative approach that would allow Musk’s companies to meet the requirement through “equity equivalent” investments, such as providing free internet access to government schools and police stations. The idea reportedly gained traction after President Cyril Ramaphosa met Musk during the United Nations General Assembly in September.
South Africa’s coalition government, which took office in June, has expressed interest in bringing Musk’s businesses into the country. In an effort to attract investment and strengthen its pro-business image, it appears willing to explore flexible terms to facilitate his entry into Africa’s most industrialized nation.
Elon Musk can’t bring Starlink to South Africa because it’s legally required that he have black business partners. What an awful regime. The Trump administration is right to pressure them. pic.twitter.com/6t6GYvX8v7
— Richard Hanania (@RichardHanania) February 14, 2025
Trump Freezes Aid Over Land Expropriation Law
Meanwhile, a separate controversy has emerged over South Africa’s land expropriation law, prompting U.S. President Donald Trump to suspend $440 million in financial aid to the country. The legislation, passed last month, seeks to address historical land ownership disparities stemming from apartheid. At present, white South Africans—who constitute just 7% of the population—own the majority of private land. The law allows the government to confiscate land under exceptional circumstances if it is deemed in the public interest, though no land has yet been seized.
Trump’s decision to halt aid has sparked backlash from South African officials, who argue that he is acting on misinformation and appealing to the concerns of white farmers. Some have drawn parallels between this demographic and Trump’s own political base in the U.S.
Hundreds of Afrikaners gathered in front of the USA Embassy in Pretoria to thank Elon Musk and Donald Trump for bringing awareness to & taking action against South Africa's 140+ race based laws.
Trump stopped all aid for SA after its new "Expropriation Without Compensation Law" pic.twitter.com/T3sFBjW2Ba
— Visegrád 24 (@visegrad24) February 18, 2025
Growing Diplomatic Tensions
The dispute has strained relations between Washington and Pretoria. U.S. Secretary of State Marco Rubio has announced that he will not attend an upcoming G20 meeting in Johannesburg in response to the law.
Ramaphosa, in his annual State of the Union address on Thursday, insisted that South Africa “will not be bullied” over its policies. Meanwhile, in a sign of escalating tensions, the country’s mining minister suggested that South Africa could respond by restricting exports of critical minerals to the U.S., a move that could have global economic implications.