Communications and digital technologies minister Solly Malatsi has outlined his reasons for recommending the approval of Dell Technologies’ Equity Equivalent Investment Programme (EEIP) renewal for the 2025-2034 period.
The decision follows a recommendation by the B-BBEE ICT Sector Council in December that the proposed R230 million EEIP deal be rejected, after the council said the US-based technology firm had not provided all the required documentation needed to assess the application.
In February, Malatsi recommended the approval of Dell’s EEIP application 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.
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.
In December, Minki Mazibuko-Thulo, chairperson of the B-BBEE ICT Sector Council, wrote a letter to Malatsi urging him to reject the application.
The B-BBEE ICT Sector Council is the primary body responsible for overseeing broad-based black economic empowerment within SA’s ICT sector. Established in 2015 and officially launched in 2016, the council serves as the custodian of the Amended ICT Sector Code.
In the letter, seen by ITWeb, Mazibuko-Thulo says the council received an EEIP application from Dell on 14 August 2025. She says the council rejects Dell’s phase two EEIP application due to the lack of information provided, which inhibited the council’s ability to comprehensively review the application.
Confidentiality concerns
According to the letter, ahead of Dell submitting its EEIP application to the council, the council informed Dell of the submission requirements with an explanation of the information required.
At the outset, it reads, Dell indicated it would not be submitting financial information due to concerns of confidentiality.
Mazibuko-Thulo notes the EEIP is pinned on three pillars: skills development, enterprises and supplier development.
“The application lacked detail on each of the elements and the implementation plan and budget were excluded from the application to the council. Dell’s refusal to provide essential financial information to the council has hindered the council’s ability to effectively review the application as it related to the contribution threshold. Dell in at least three instances declined to provide the requested information,” the letter reads.
“The council then proceeded with a review of the incomplete application as submitted. The information lacked critical detail and rendered it unable to make a recommendation on the application. Instead, the council elected to provide the ministry and department with the council’s analysis and recommendations.”
The B-BBEE ICT Sector Council said it was unable to determine whether Dell’s proposed EEIP met the required value threshold because the company did not provide key financial information, including details of its South African operations, turnover and a programme budget.
The council also raised concerns that Dell submitted two versions of the application with significantly reduced targets – including cutting the number of graduates to be trained from 150 to 50 and reducing participating enterprises from 15 to 10 – while the value threshold appeared unchanged.
It further noted several claims made during engagements, such as market-related stipends for students and flexible enterprise development support, were not substantiated in the application.
While the council said the programme concept showed potential to support skills development, enterprise and supplier development in the ICT sector, it found that critical details were missing, including plans for supporting black women-owned AI businesses and provisions for persons with disabilities.
The council recommended that future EEIP applications include complete documentation, standardised information for all stakeholders, and a transparent monitoring and evaluation framework with regular independent reporting and periodic programme reviews.
Not binding in law
ITWeb reached out to the Department of Communications and Digital Technologies to request its reasons for recommending the deal be approved after it had been urged to reject it.
Says Malatsi: “It’s important to note that Dell first approached the B-BBEE ICT Sector Council in June 2025 in terms of the council’s role to assess EEIP applications in the sector and make recommendations to the minister.
“On 3 December 2025, I, together with officials from the department led by the director-general, met with Dell to discuss the application and requested that it be strengthened in certain areas, which Dell subsequently addressed.”
According to Malatsi, on 5 December 2025, the council shared its assessment with him, noting that its views are advisory and not binding in law.
“Specifically, the council stated that ‘its submission may not be read as a conclusive assessment of the viability of Dell’s EEIP application’ and confirmed that it remains committed to monitoring the programme should it be approved.”
He adds that Dell submitted the required documentation as part of its application, which was comprehensively assessed by the Department of Communications and Digital Technologies.
“Following this assessment, I recommended approval of Dell’s EEIP to the minister of trade, industry and competition, Parks Tau, whose department is the final decision-maker on EEIP approvals.
“My recommendation for approval is based on the proposed investment of more than R230 million in South Africa’s digital economy, focused on supporting SMMEs, developing digital skills and expanding opportunities for young people, while contributing to broader economic empowerment outcomes.”
Asked if it had submitted the requisite documentation for the application, Dell tells ITWeb that it remains dedicated to supporting South Africa’s digital economy and driving meaningful, sustainable transformation through its EEIP.
“As the programme is still under normal government review, it would not be appropriate to comment on specific aspects of the application at this time. Dell values these processes and is committed to working closely with the relevant government stakeholders and partners to ensure the programme delivers on its intended measurable value to South Africa’s SMME ecosystem and broader technology,” the company says.
Application under review
Meanwhile, the DTIC confirmed it has received the recommendation from Malatsi to approve the application.
DTIC spokesperson Bongani Lukhele tells ITWeb that the proposal is being considered for compliance and its impact on addressing the country's socio-economic priorities.
He notes that the application is currently under review, based on the information submitted to date, and should any additional documentation be required, the DTIC will formally request it from Dell Technologies.
“The proposed investment aims to advance transformation through the development of critical digital skills and enterprise and supplier development initiatives, with a particular focus on underserved areas, women and youth. This intervention is expected to contribute to job creation and support the broader transformation of the ICT industry,” says Lukhele.
He explains that the documentation required for the renewal of an EEIP agreement typically includes the following: the shareholding structure of the multinational company; a letter from the holding company confirming its global policy of not selling equity; an independently reviewed business valuation report; a letter of support from the relevant sector council (where available, though not compulsory); a detailed investment proposal; the company’s latest independently audited financial statements; and an in-principle letter of support from the relevant line ministry in South Africa.
According to Lukhele, the EEIP has, broadly, made a substantial contribution to the South African economy. “This includes promoting enterprise and supplier development, developing critical skills, and creating employment across sectors such as ICT, automotive, manufacturing, maritime and financial services. The programme has also advanced the empowerment of women and youth, particularly in underserved areas.”
Earlier this month, Khusela Sangoni-Diko, chairperson of the Portfolio Committee on Communications and Digital Technologies, wrote to Malatsi, seeking detailed clarity on the recommendation to approve Dell’s EEIP deal.
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