Equity equivalent investment programmes are specifically designed for wholly foreign-owned multinationals, enabling them to contribute to broad economic inclusion in ways other than ownership. In May 2025, I published a draft policy direction that required South Africa’s broadcasting authority, Icasa, to align the licensing framework for, among others, communications operators, with the national economic empowerment legislation. This move aims to address the regulatory inconsistencies resulting from the limitation on control and ownership regulations that Icasa adopted in 2021 and then amended in 2022.
These regulations refer to the Broad-Based Black Economic Empowerment Act (the BBBEE Act) and the ICT Sector Code, but only certain provisions from these two legal texts have been adopted by Icasa. Icasa has preferred strict equity ownership as a measure of broad-based black economic empowerment. Different sectors of the economy (like agriculture, finance, mining, telecommunications and broadcasting) have their respective sector codes that set out how each sector will comply with the BBBEE Act.
For context, the ICT Sector Code was approved by the Department of Trade, Industry and Competition (DTIC) in 2016. The ICT Sector Code provides for the empowerment of black people in different ways, including procuring services and goods from SMMEs or black-owned businesses, ensuring black people are properly represented in the management of companies, and offering shares to black people so that they can own a part of businesses in different sectors of the economy. Under Statement 103 of the ICT Sector Code, the DTIC has made provision for equity equivalent investment programmes, or EEIPs.
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These alternative ownership mechanisms are specifically designed for wholly foreign-owned multinationals, enabling them to contribute to broad economic inclusion in ways other than ownership. The logic is simple: instead of selling equity stakes, companies can earn full ownership scorecard points by investing in initiatives that benefit black South Africans, such as skills development programmes, enterprise and supplier development, and critical infrastructure investments. When I published the policy direction for public comment, my opponents wrongfully claimed that this was a case of “executive over-reach”.
Nothing could be further from the truth. Both the Electronic Communications Act (ECA) and the Icasa Act clearly set out the powers of the minister of communications and digital technologies and of Icasa, as the sector regulatory authority. Policy directions are legal instruments provided for in the ECA that the minister can use to ensure that national and sectoral goals are achieved.
The ECA specifically empowers me as the minister to issue policy directions to Icasa. Such a policy direction requests Icasa to implement a national policy or part of a policy, or to take a specific action. It is worth recalling that Icasa consulted with the ICT sector over more than 10 years about how the industry wanted to give effect to the BBBEE Act.
Repeatedly, numerous stakeholders recommended aligning the position with the ICT Sector Code in terms of national legislation. However, after considering the responses, Icasa decided to adopt only one aspect of the ICT Sector Code: ownership.
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