Minister Solly Malatsi says a claim he is trying to circumvent transformation laws through the equity equivalent investment programmes (EEIPs) are baseless and false.
This, after Khusela Sangoni-Diko, chairperson of the Portfolio Committee on Communications and Digital Technologies, issued a statement this week expressing concerns over what she said appears to be the minister’s attempts to “thwart South Africa’s transformation laws” to appease business.
The Parliamentary portfolio committee is the legislative’s oversight body for the Department of Communications and Digital Technologies (DCDT), which is headed by Malatsi.
At the heart of the matter is dissolving IT procurement arm the State IT Agency’s (SITA’s) powers to departments and the draft policy directive to lower regulatory hurdles in the country.
The policy directive, initially announced last year, would seek to clarify the DCDT’s position on the recognition of EEIPs in the ICT sector, potentially making way for satellite internet services like Elon Musk’s Starlink.
Sangoni-Diko expressed concerns over the process to gazette the proposed regulations for the SITA Act and the Electronic Communications Act (ECA), saying such changes seek to “cut corners and erode hard-won transformation goals”.
The ECA explicitly states that the percentage of equity ownership to be held by historically disadvantaged groups must not be less than 30% for any potential licensee seeking to operate in the telecommunications, broadcasting or postal sectors in SA, she noted.
“Minister Malatsi should know that when it comes to transformation in the ICT sector, the law is clear on compliance and that cutting corners and circumvention is not an option – least of all to appease business interests.
“It appears these proposed directives and regulations are an attempt to undermine empowerment legislation by stealth and, should this be found to be the case, they will be fiercely opposed.”
The portfolio committee is on record affirming its support for government’s efforts to attract investment and meet the National Development Plan target of universal coverage by 2030. However, these imperatives must and can be achieved within the laws governing the country, stated Sangoni-Diko.
Meanwhile, Sangoni-Diko congratulated MTN and Lynk Global for successfully conducting Africa’s first satellite-to-phone voice call in the North West, saying the initiative indicates there is no need for overreliance and obsession with a single satellite provider.
“Several other satellite providers have indicated keen interest in entering the South African market and in compliance with our laws. The minister is urged to follow the proper channels if amendments to the law are sought, as any attempt to subvert the country’s hard-fought-for and won transformative laws will be resisted.
Malatsi, however, has slammed the chairperson’s claims, describing them as devoid of truth.
“The SITA regulations, which enjoy overwhelming support from ministers in the Government of National Unity, as well as provincial governments, give departments the freedom to procure outside of SITA.
“To do so, departments must be able to present a strong and viable business case, within existing public procurement prescripts, at a faster turnaround time and lower cost. This flexibility can improve public services for all South Africans by ensuring government can respond faster and spend resources more efficiently, something which has been requested by several government departments for some time.
“These regulations are fully aligned with existing laws on government procurement and already have the concurrence of the minister of finance, as required by the SITA Act.”
Turning to EEIPs, Malatsi notes these are permissible by law in SA and have been the source of major economic investments, including in sectors such as the automobile industry.
“Recognising their potential, the government’s Medium-Term Development Plan, formally approved by Cabinet, has adopted the introduction of EEIPs in the ICT sector. Claims that these proposals undermine transformation are baseless and false.
“It is plain for all to see that this propaganda campaign is part of Ms Sangoni-Diko’s political audition for a possible executive role. We see it for what it is, and we will not be distracted from improving the delivery of services to the citizens of this country.”
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