Khusela Sangoni-Diko, chairperson of the Portfolio Committee on Communications and Digital Technologies, has written to communications and digital technologies minister Solly Malatsi, seeking detailed clarity on the recommendation to approve Dell Technologies’ Equity Equivalent Investment Programme (EEIP) renewal for the 2025-2034 period.
The request follows Malatsi’s decision last week to recommend approval of the application. The proposal was submitted to trade, industry and competition minister Parks Tau in his capacity as executive authority at the Department of Trade, Industry and Competition, which facilitates and serves as the final arbiter of EEIP applications.
Malatsi said the recommendation followed the communications ministry’s assessment of Dell’s application to renew its EEIP commitment for a further 10 years.
According to the application, Dell’s proposed EEIP investment exceeds R230 million and will be channelled directly into the local economy.
The EEIP draft policy has recently sparked controversy in South Africa’s technology and telecommunications sector, particularly in relation to satellite internet providers such as Starlink.
The policy is intended to allow multinational companies that cannot meet the country’s black economic empowerment (BEE) ownership requirements to instead invest in social or economic development initiatives as an alternative form of compliance.
Critics argue that the framework could effectively create a workaround for companies unwilling or unable to dilute ownership, while supporters say it provides a practical path to attract global technology firms and expand connectivity in underserved areas.
The debate has intensified as policymakers consider whether allowing EEIPs could pave the way for services like Starlink to enter the South African market more easily, while still contributing to local economic transformation objectives.
Under the framework, multinationals seeking EEIP approval must provide proof that they have not entered into ownership partnership arrangements in other countries globally.
The programmes are designed to promote investment in the development of small, medium and micro enterprises and support broader participation in the economy.
Several global technology companies have already adopted the approach. Microsoft, Amazon Web Services and Samsung, as well as companies in the automotive sector, have made EEIP commitments aimed at supporting enterprise development, digital skills programmes and other economic empowerment initiatives.
In the letter to Malatsi, seen by ITWeb, Sangoni-Diko says while she acknowledges the reported R230 million investment commitment towards SMME development and digital skills advancement, the renewal of an EEIP – which substitutes for direct ownership under the ICT Sector Code – must be supported by clear evidence of impact.
She adds that the committee expects verifiable proof of past performance and measurable transformation outcomes before such arrangements are renewed.
As part of her inquiry, Sangoni-Diko asked whether a formal audit or independent performance evaluation of Dell’s previous EEIP was conducted prior to recommending renewal.
The chairperson also underscored that the legitimacy of an EEIP rests not on headline investment figures, but on demonstrable outcomes.
Her letter further requests clarity on whether all milestones under the previous EEIP were achieved within agreed timeframes, whether any instances of non-compliance or under-performance occurred, and what corrective actions were implemented.
Sangoni-Diko also asked whether lessons from the prior cycle informed the structure and design of the renewal proposal.
Given that EEIPs substitute for ownership obligations under the ICT Sector Code, the chairperson is also seeking clarity on the criteria used by the department in forming its recommendation. She asked whether the proposed R230 million commitment is proportionally aligned with Dell’s South African revenue footprint, and how the renewal proposal advances technology sovereignty, strengthens local capacity, and promotes meaningful participation within the ICT value chain.
She reiterated that transparency, accountability and procedural integrity are essential to maintaining investor confidence and the credibility of South Africa’s transformation framework.
“The integrity of the EEIP instrument depends on a rigorous approval process grounded in evidence, compliance and measurable impact. Renewal cannot be a routine administrative exercise; it must be justified by demonstrated performance and clear developmental value,” she said.
Sangoni-Diko underscored the committee’s commitment to ensuring empowerment instruments within the ICT sector deliver substantive transformation outcomes, while preserving regulatory certainty and investment stability.
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