Billionaire Elon Musk has recently become involved in South African political matters just as SpaceX is seeking a License to operate in the country. He's recently stirred controversy with his outspoken criticism of South Africa’s Black Economic Empowerment (BEE) laws, labelling them as “racist.”
He accused President Cyril Ramaphosa’s government of developing “openly racist ownership laws”. This comments have reignited a global debate about the effectiveness and fairness of these laws, designed to address the country’s historical inequalities.
In this article, we’ll break down what Musk said, what BEE laws are, and why this issue has sparked such heated discussions both in South Africa and beyond.
What did Elon Musk say about “racist ownership laws’ in South Africa?
In a post on X (formerly Twitter), Musk criticised South Africa’s BEE laws, claiming they promote discrimination based on race. As someone born in South Africa, Musk’s views carry a personal weight.
His comments follows US President Donald Trump’s decision at the weekend to stop sending aid to South Africa over its land expropriation policies, a move that sparked a selloff in the rand on Monday.“The United States won’t stand for it, we will act,” Trump said in a Sunday evening post on Truth Social. “Also, I will be cutting off all future funding to South Africa until a full investigation of this situation has been completed!”
In response, Ramaphosa posted on X that his government “has not confiscated any land” and that the recently adopted Expropriation Act “is not a confiscation instrument” but rather a “constitutionally mandated legal process that ensures public access to land in an equitable and just manner as guided by the constitution”. “South Africa, like the United States of America (USA) and other countries, has always had expropriation laws that balance the need for public usage of land and the protection of rights of property owners,” Ramaphosa posted.President Cyril Ramaphosa of South Africa.
“We look forward to engaging with the Trump administration over our land reform policy and issues of bilateral interest. We are certain that out of those engagements, we will share a better and common understanding over these matters.”
South Africa is a constitutional democracy that is deeply rooted in the rule of law, justice and equality. The South African government has not confiscated any land.
— Cyril Ramaphosa 🇿🇦 (@CyrilRamaphosa) February 3, 2025
The recently adopted Expropriation Act is not a confiscation instrument, but a constitutionally mandated legal…
Donald Trump’s post came after reports highlighted the challenges some businesses face in meeting the strict requirements of BEE compliance, particularly for foreign investors.
Following Trump’s post on Truth and Ramaphosa’s response on Twitter, Elon Musk reposted Ramaphosa’s comments and asked: “Why do you have openly racist ownership laws?”
Why do you have openly racist ownership laws? https://t.co/tHWVsmB04F
— Elon Musk (@elonmusk) February 3, 2025
Elon Musk is a South African-born in paternal side. He has also has intervened in the politics of other nations, including the United Kingdom (UK) and Germany where he has come out in support of far-right political parties.
Elon Musk inflammable post comes just days after he recently criticised South Africa’s rule that companies must give 30% ownership to groups harmed by apartheid (a past system of racial segregation). This came after SpaceX asked regulators to rethink the rule, arguing it could hurt fair business competition. TechCentral reported SpaceX’s concerns in a letter sent to officials.
Musk’s statement: “why do you have openly racist ownership laws” suggests that South Africa’s race-based laws are not only unfair but also harmful to the country’s economic growth. His remarks quickly went viral, drawing both support and backlash from politicians, business leaders, and ordinary citizens.
What Are South Africa’s BEE Laws?
The Black Economic Empowerment (BEE) policy was introduced in the early 2000s as part of South Africa’s efforts to correct the economic disparities created during the apartheid era. Under apartheid, the majority Black population was systematically excluded from owning businesses, accessing quality education, and participating in the formal economy.
However, the BEE laws directed for the purpose of:
- promoting Black ownership in businesses,
- encouraging diversity in management positions
- and supporting skills development for historically disadvantaged groups.
To comply, companies must meet targets related to Black ownership, management control, and socio-economic development. Businesses that achieve high BEE scores gain advantages when bidding for government contracts and securing licences.
Why Is This Controversial?
While many South Africans other part of the world see the BEE law as an essential tool for economic justice, critics argue that it has unintended consequences such as:
- Challenges for Foreign Investors and Companies: For example, SpaceX’s Starlink may find it difficult to meet ownership requirements if they don’t have local partners. This discourages many potential investments in the country.
- Claims of “Reverse Discrimination”: Some argue that BEE creates a new form of inequality by favouring one group over another, which was the basis of Musk’s criticism on President Cyril Ramaphosa’s tweet on X, formerly Twitter.
- Corruption and Abuse: There have been cases where BEE has been manipulated to benefit politically connected individuals, rather than the broader population.
However, according to Minister of Trade and Industry in South Africa, Ebrahim Patel, he said: “BEE is not about discrimination; it’s about creating opportunities for those historically denied them. Economic transformation is key to South Africa’s future.”
Is There a Middle Ground?
Many experts believe the answer lies in reforming, not abolishing, BEE policies. They say adjustments could include:
- Focusing on socio-economic upliftment rather than rigid ownership quotas.
- Promoting entrepreneurship across all communities while still addressing historical injustices.
- Reducing red tape to make compliance easier for international companies.
What do you think about Trump’s actions and Elon Musk’s comments about the BEE Law in South Africa? Let’s view your opinions in the comments section. For more articles like this, stay tuned to our blog for the latest in business, politics, and global affairs.
