South Africa’s Economic Uncertainty: Land Seizures, B-BBEE, and Elon Musk’s Opposition

South Africa is at an economic crossroads. Its new land expropriation policy has sparked a heated debate. Designed to address historic land inequalities, the policy grants the government the power to redistribute privately owned land under specific conditions.

While supporters view it as a necessary correction of past injustices, critics warn it could erode property rights and scare off investors.

The controversy intensified when U.S. President Donald Trump responded within 24 hours, warning that the U.S. might reconsider its funding to South Africa over the bill.

Meanwhile, billionaire Elon Musk, a vocal critic of South Africa’s economic policies, took to X (formerly Twitter) to challenge President Cyril Ramaphosa over the country’s Black Economic Empowerment (B-BBEE) regulations.

In a direct quote to Ramaphosa, Musk asked, 'Why do you have openly racist ownership laws?' His remarks reignited debates over whether these policies truly promote equality or deter investment.

Mr. Musk had broken financially even in the United States. Despite his remarkable global success, his relationship with his birth country has remained complicated. This is because of South Africa’s complex socioeconomic and controversial policies like the Broad-Based Black Economic Empowerment (B-BBEE).

In the X post, Musk was reacting to President Cyril’s take on Donald Trump’s claims that South Africa is snatching and confiscating lands through the expropriation bill. The expropriation bill, introduced in the post-apartheid SA, was intended to correct historical inequalities created by the colonists who had taken the lands in the urban areas of South Africa.

This matter has spurred a lot of uproar in respect of the bigger geopolitical picture and the smaller satellite internet.

While land expropriation dominates headlines, economic concerns are surfacing in other sectors as well. In its tech sector, SpaceX, the provider of Starlink internet services, has halted negotiations with the Independent Communications Authority of South Africa (ICASA).

The company cited concerns over Black Economic Empowerment (BEE) regulations, which require foreign firms to cede ownership stakes to historically disadvantaged groups. SpaceX’s withdrawal raises questions about whether such policies could deter technological growth and investment.

In the next sections, we break down the economic and political fallout of these policies;

The New Land Policy gives the SA government the authority to confiscate private properties against the wishes of the owners. This is intended to ostensibly be of benefit to the general public.

The policy was passed on the 23rd of January, 2025 after being debated for five years. Despite the good intentions of the South African government with this bill, critics have been arguing that this new development may deter foreign establishments and investments. Or, cause foreign investment hurdles in the South African Tech sector. It could also lead to the harm of property rights.

During the era of colonialism and apartheid in South Africa, policies like the 1913 Native Land Act denied the Black South Africans access to owning lands. They were also restricted from leasing lands. This act resulted in widespread national dispossession. And land ownership was willed to the concentration of the minority –white South Africans.

The apartheid era has come to an end after over thirty years and a lot of private lands are still in the possession of the minority White South Africans. This is the case that President Cyril Ramphosa and the current African National Congress (ANC) sought to address.

The emphasis of the new law is to address the historic wrong of the apartheid system. President Ramphosa had posted on X, “The South African government has not confiscated any land. The recently adopted Expropriation Act is not a confiscation instrument, but 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 and other countries, has always had expropriation laws that balance the need for public usage of land and the protection of the rights of property owners. 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.”

According to the Minister of Deputy Public Works and Infrastructure, Sihle Zikala, the expropriation bill can be described as the peak of long-suffering and communal struggle towards land dispossession.

A law professor, Zsa-Zsa Temmers, in an article with the title ‘Land Seizure and South Africa’s New Expropriation Law: Scholar Weighs up the Act; explained that this new policy oversees the compulsory confiscation of the privately-owned properties by the state for the general interest of the citizens. The New law aims to set the expropriation rules in line with the national constitution and provide concise procedures for compensation.

According to her, “Expropriation of property is a potential tool to reduce land inequality. This has become a matter of increasing urgency. South Africans have expressed impatience with the slow pace of land reform.”

She also mentioned that the expropriation has not been effectively utilized for land redistribution, “ I am not convinced that the act, in its current form, is the silver bullet to effect large-scale land reform –at least not the type of radical land reform that South Africa urgently needs. Understandably, the act will have a severe impact on property rights. But it still substantially protects landowners affected by expropriation. Only in very limited cases would they not be compensated,” the Law professor said.

Amid concerns over South Africa’s economic policies, an alternative approach—the Economic Empowerment Program (EEP)—has been proposed.

Unlike B-BBEE, which mandates racial ownership quotas for businesses, the EEP prioritizes long-term investment in social and economic development without strict ownership requirements.

Supporters argue that EEP creates a more sustainable and inclusive business environment, while critics question whether it will effectively redress economic disparities.

This vision, over the years, had been obstructed by the presence of the B-BBEE implementation. Although the initial vision of the B-BBEE had been to ensure that Black South Africans had opportunities and access to meaningful and better economic participation, the promise of this policy was unfortunately not lived up to.

This is the point where the new EEP policy offers a better alternative. So, instead of just concentrating on meeting quotas of ownership, this new development encourages long-term investment of companies in socio-economic establishments.

The EEP supports the core of empowerment. The stark difference between the traditional B-BBEE and EEP is that the latter enables establishments like Starlinks to add to South Africa’s growth in a way that’d be in tune with the constitutional values and policies. Like the satellite internet providers' compliance with African laws.

The debate around the entry of Elon Musk’s Starlink licensing issues in South Africa has caught the interest of not just the lawmakers. But also the attention of a lot of international public figures. Elon Musk has particularly found himself in the middle of diplomacy between the United States and South Africa. It seems like a puzzle of where his loyalty lies.

Recently, Trump raised concerns about South Africa’s new land policy, claiming it allows for expropriation without fair compensation.

While the South African government insists that the law follows constitutional guidelines, critics argue that it could undermine property rights and deter investment.

This has led to growing tensions between the U.S. and South Africa, with Musk also weighing in on the debate.

Some of these comments which were all threatening to cut off the United State’s government funding to South Africa have caused further uproar in the already heated argument.

While land expropriation and Starlink’s licensing issues are distinct matters, both highlight a broader concern; South Africa’s evolving regulatory environment. The expropriation policy raises fears about property rights, while BEE regulations create challenges for international companies like Starlink.

Together, these policies contribute to growing uncertainty among foreign investors, who worry about their ability to operate within the country’s shifting economic landscape. Elon Musk's worries about the new expropriation bill, especially in terms of ownership policies, scream wider concerns about the country's regulatory environment.

It's obvious that businesses, like Starlink South Africa, may struggle to navigate the constitutional complexities of South Africa. Even if their intentions are in line with South Africa’s vision of an all-inclusive and non-racial economic development.

President Ramphosa responded with tact and diplomacy, reiterating South Africa’s commitment and vision to ensuring the constitutional values of inclusion, fairness, and equality. When he discussed with Elon Musk, he clearly stated that the country's approach to economic reformation was deeply rooted in South Africa’s constitution. This mandates that the laws must work to correct the historic wrongs of the past. These policies must not be tampered with, no matter what foreign investors propose, or however pinched they may feel by these new regulatory policies.

The crucial point is the tension between attracting foreign investors and sticking to the new transformative policies. These policies must be straightforward, balanced, and transparent. According to the constitution, this expropriation bill must bring commonweal. And this vision can only be achieved by modeling policies like the EEP.

You can learn more about the broader implications of Trump's policies on Africa here.

Critics have continued to debate about the impact of the new Expropriation Bill on South Africa. They believe that this new development may have far-reaching and economic consequences –as well as social repercussions.

The pertinent question is: will the new expropriation policy drive meaningful transformation as envisioned by the South African government? Or, will it cripple the country's economic growth? Or, worse, cause division?

While the intention of the expropriation bill may be meaningful, the impact could be severe. A key factor that must be considered is investor confidence. South Africa has long faced challenges in attracting Foreign Direct Investment (FDI), and the uncertainty surrounding its land policies may further complicate this issue.

Concerns over property rights have made investors hesitant, fearing that their assets could be seized without adequate compensation. If investor confidence declines, the country could face job losses, capital flight, and slower economic growth, further exacerbating existing economic challenges.

Agriculture, which is a major sector in South Africa, is specifically at risk. Farmers are wary of investing in their farmlands, Tech, general agricultural improvement, or any sort of expansion with the same fear of possible confiscation of land. Food security could be threatened by a major decline in agriculture. And drive inflation in the cost of feeding.

Beyond economic concerns, the bill also raises constitutional and legal questions. The New bill is for the public benefit of the citizens. But, the clause “Without compensation” has challenged the traditional understanding of property ownership and rights. Some economic experts argue that since there is no compensation policy made by the government they may just keep on confiscating lands non-stop.

Elon Musk has called for international sanctions against Julius Malema, leader of the Economic Freedom Fighters (EFF) after Malema chanted 'Kill the Boer' at a political rally.

Malema, a vocal proponent of radical land reform, has long argued that land redistribution is essential to correcting historical injustices.

However, critics—including Musk—claim that his rhetoric promotes racial division and incites violence. Musk’s remarks have reignited debates on free speech, political extremism, and South Africa’s approach to economic transformation.

In a series of X posts, Musk queried Ramphosa, “Why do you allow this, @CyrilRamaphosa? This is a major political party in the South African parliament and their leader is calling for genocide of white people.”

The recent X feud between the EFF president and Elon Musk has spurred more debates on the expropriation bill, economic policy, and South Africa’s political future. Malema still maintains his stand that the land redistribution is an important step to realigning the past historical injustice.

Elon Musk, according to the White house, is currently serving under the presidency of President Donald Trump, on special employment. After the presidential election in the United States in November 2024, Trump employed Vivek Ramaswamy and Elon Musk as the head of the ‘Department of Government Efficiency’ (DOGE).

In a 2018 viral video, Julius Malema stated that his party, the EFF, sought to remove a white mayor in Port Elizabeth, citing racial representation as the reason.

Malema argued that targeting white political figures was a necessary step toward dismantling systemic inequalities. His comments sparked controversy, with critics accusing him of promoting racial division.

According to Malema, “We have taken a decision that we are going to remove the mayor of PE (Port Elizabeth).” This statement was made while he was addressing the crowds in Johannesburg at the Standard Bank Arena.

“Why? Why not [Mayor of DA-led Johannesburg Herman] Mashaba, why not Solly [Msimanga–Mayor of DA-led Tshwane]? Because the mayor of the DA in PE is a white man. So, these people, when you want to hit them hard –go after a white man. They feel a terrible pain because you have touched a white man.”

After his address, he went further to clarify that it doesn't mean that Mashaba and Msimanga were free from being targeted. He also added that they’ll definitely be “touched” one day.

“But, we are starting with the whiteness. We are cutting the throat of whiteness. Trollip will not be a Mayor after the 6th of April if they give us that date,” Malema said.

7 years later, Musk reacted to Malema’s address in an X post, “ Immediate sanctions for Malema and declaration of him as an international criminal!”

However, Malema had called Musk’s bluff in a statement dismissing Musk’s reaction as a part of the broader totalitarian agenda. Malema also accused Musk of meddling with the domestic affairs of South Africa.

The way forward is well-defined. South Africa needs a strategy that aligns with its constitutional needs and economic ground realities.

The EEP policy brings about the opportunity to do that. By enabling satellite internet licensing and other tech investments, South Africa can foster an economy that’ll cater to all and sundry. This strategy will ensure that both local and international businesses will contribute towards a fair and equitable nation without being bogged down by a stiff ownership quota thereby causing disparities. This strategy is not just practical, it is also beneficial.

In the end, by fostering a business-friendly environment while still addressing historical inequalities, South Africa can work toward an inclusive economy that benefits all. However, success will depend on whether these reforms are implemented transparently and equitably. The challenge now is not just about whether Starlink or foreign investors will return; it’s about ensuring that South Africa’s economic policies create lasting progress for both businesses and its people.