Communications minister Solly Malatsi has recommended the approval of Dell Technologies’ equity equivalent investment programme (EEIP) application.
The application was made to minister Parks Tau, in his capacity as executive authority at the Department of Trade, Industry and Competition (DTIC), which facilitates and is the final arbiter for EEIPs.
In a statement, Malatsi says the recommendation follows the communications ministry’s assessment of Dell’s application to renew its EEIP commitment for a further 10 years.
Dell’s proposed EEIP investment exceeds R230 million directly into the local economy.
The value also extends beyond funding opportunities for SMMEs and young people to access capital and growth support for sustainable expansion, adoption of AI-powered tools and integration into supply chains, among others, says the statement.
“South Africa stands at a pivotal moment, with high levels of youth unemployment, a widening digital skills gap and persistent systemic barriers faced by SMMEs.”
EEIPs were created for multinationals whose global practices or policies prevent them from complying with the ownership element of broad-based black economic empowerment (B-BBEE) through the traditional sale of equity or shares to black South Africans.
Such multinationals must provide proof that they have not entered any ownership partnership arrangements in other countries globally. EEIPs aim to promote investment in the development of SMMEs and broad-based participation in the economy. For example, Microsoft, Amazon Web Services, Samsung and several companies in the automotive industry have made EEIP commitments.
EEIPs have come into sharp focus, as Elon Musk’s low-Earth orbit satellite internet constellation company Starlink looks to operate locally.
Malatsi last year published a policy direction over extending EEIPs into the telecoms sector. The minister instructed the Independent Communications Authority of South Africa to recognise EEIPs as an alternative to a law that requires telecommunications network service providers to be 30% owned by historically disadvantaged groups.
As a legally recognised pathway for investment in SA, Malatsi notes that EEIPs ensure economic inclusion by enabling multinationals to invest in the country, while committing to broader empowerment of society through a series of measurable outcomes.
“A key element of EEIPs is ensuring commitments are met through regular monitoring and reporting to the DTIC, the Department of Communications and Digital Technologies and the ICT Sector Council. Reports include KPIs and milestone achievements and are supported by implementation oversight.
“The extension of the Dell EEIP aligns with the Government of National Unity’s’ medium-term development programme target of full recognition of EEIPs in the ICT sector and supports foreign direct investment that our economy needs.”
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