The Political Party Funding Act requires parties to disclose donations above a certain threshold but it falls short of mandating transparency on expenditure. (Delwyn Verasamy/M&G)
Finance Minister Enoch Godongwana is under fire for allocating an additional R1.1 billion to political parties over a three-year medium term, with critics questioning the wisdom of funnelling taxpayer money into political coffers while the country faces a fiscal cliff.
At the Electoral Commission of South Africa’s (IEC) recent inaugural symposium on political funding, Godongwana also proposed a shift towards fully public-funded parties, arguing that reliance on private donors undermines accountability.
Analysts have warned that this move could entrench the dominance of larger parties, stifle political competition and deepen public distrust in an already fragile democracy.
He told the conference that over the medium-term policy framework, which provides a three-year rolling budget plan, “an additional R1.1 billion in funding will be made available to political parties”.
“Mindful of next year’s local government elections, however, we are considering availing even further funding. In my view, political parties must be fully publicly funded.
“Political funding for political parties from the public purse carries obligations — there’s going to be accountability and transparency. The auditor general must be able to audit for that accountability.”
The finance minister’s vision of a fully state-funded system has raised critical questions about fiscal priorities, transparency and the potential for political manipulation in a country grappling with an economy projected to grow less than 1% this year, crumbling public services and a cost-of-living crisis fuelled by rising energy and food prices.
The move is a misallocation of scarce resources, University of KwaZulu-Natal political analyst Lubna Nadvi argued.
“Allocating additional funds to political parties, who should be sourcing their own funding for their activities, appears irresponsible given the other socio-economic priorities South Africa has,” she said.
“If political parties get additional funds in an election year, it works to their advantage, as they can campaign more effectively and possibly win more votes.
“But any extra funds should ideally be directed towards areas such as health and education given the dire state these are in.”
Independent political analyst Ralph Mathekga echoed this sentiment, describing the allocation as a “moral problem” that risks further eroding public trust.
(Graphic: John McCann/M&G)
“It’s almost like there is a proliferation of political parties. You form a political party, you get a few seats, you’re going to get this money.
“The public is suffering. We have been told to tighten the belts. The economy is growing less than 1% and our money is being dispersed to institutions that we have little knowledge [of] when we don’t have that much accountability coming from that. It’s quite a moral problem,” he said.
Another University of KwaZulu-Natal political analyst, Zakhele Ndlovu, said R1.1 billion was “a huge amount in a country with so many problems”.
“This money can be invested in combating crime, skills development. What value do so many political parties add to democracy? We simply cannot afford to spend so much on political party funding.
“Our government already spends too much on the bloated executive branch. It appears this government is reckless with the purse. Our budget deficit is soaring with debt servicing and the public wage bill taking a lion’s share.”
South Africa needs to examine the meaning of electoral fairness and competitiveness, including scrutiny of who benefits more from this additional funding, between the small and big parties, Ndlovu added.
“The bigger question is: how does so much funding of parties improve the ability of voters to hold elected representatives accountable?
“Isn’t, ultimately, the purpose of elections to hold representatives accountable?
“This ridiculous spending on political parties encourages some people to establish parties that do not add value to our democracy.
“The whole system needs to promote transparency and accountability. Some funds that parties receive go towards maintaining the lifestyle of certain politicians.
“It’s going to entrench existing power dynamics. It serves to encourage people to see politics as a career — in particular smaller parties.
“Grassroots campaigning will be impacted with additional funding but voter engagement is problematic because our voters are not equipped to ask pertinent questions and lack information,” Ndlovu said.
The IEC’s latest funding report shows that in 2022-23 political parties received R342 million of public funding from the treasury through the commission, according to Joel Bregman, a researcher with civil society organisation My Vote Counts.
“In 2023-24, it was an election year, so that’s why it’s so high — they got R850 million.”
Bregman added that, in light of the disbursements in recent years, the R1.1 billion over three years was “nothing extraordinary”.
The Political Party Funding Act requires parties to disclose donations above a certain threshold but it falls short of mandating transparency on expenditure.
It allows donations below R100 000 to go undisclosed, exempts individuals from disclosure, ignores cumulative donations from related entities, allows individual donations of up to R15 million a year and grants the president complete discretion over funding limits.
Critics have warned this gap fuels public suspicion that funds, whether public or private, are being misused.
Mathekga argued that the law is “crippled” because it does not allow for deeper scrutiny of the internal spending of this money.
“There’s nothing in the Act that says they need to disclose how they spend the money, right? As long as we know who gave you the money, that’s enough,” he said.
“That’s not enough, because who gave you the money is the beginning. To attain full disclosure, and to build trust, we need to go deeper into the internal processes.”
He pointed to the opacity of parties like uMkhonto weSizwe (MK), the Democratic Alliance (DA) and the ANC, which resist disclosing how funds are spent internally.
“You can go to the DA, you can go to the MK party. They can differ in terms of policy but one thing that they are going to hold together on and unite is on us asking them, ‘Did your secretary general buy flowers for their whoever with the money?’ They don’t like to do that,” Mathekga said, adding that constituency funds were of particular concern.
“There’s a difference between constituency and campaigning. The money ends up being used for internal struggles or it’s used to exacerbate the scourge of this internal instability of South Africa’s political parties.”
The public has a right to transparency regarding funding, Nadvi said.
“Every time political parties source funding or receive it from the government, the public is entitled to know the source of the donation, so transparency and accountability are given in every instance.
“There will certainly be concerns in the public space, which is understandable, given the way political parties conduct themselves sometimes,” he said.
University of South Africa political analyst Dirk Kotze described Godongwana’s push for fully public-funded parties, which he argued would ensure “stability, transparency and participation” as “populist” with “complex” consequences.
“The practical implications of it are possibly unknown to him but they are quite complex. For example, will it prohibit any form of private funding; will it disallow parties to receive interest on their investments — like the ANC from Chancellor House; will the income from membership fees be prohibited?” Kotze said.
The current funding model allocates 90% of public funds proportionally based on parliamentary seats and 10% equitably, favouring larger parties such as the ANC and DA.
“If the party funding is limited to public funding only, it includes the following risks: the ratio of 90:10 will benefit the bigger parties disproportionately, public funding will be dependent on what is affordable for the national budget and can become insufficient, public funding makes the parties dependent on political decisions and possible manipulation,” Kotze said.
Bregman said there was also a threat to political competition.
“If you really make it difficult for new parties to raise funds, it could be used as a way just to consolidate the power of people who are already in power,” he said.
“If you’re currently in parliament, and you are outlawing or making it very difficult for private funding to happen, then it’s going to wipe out a lot of political competition.”
He added that there are also potential constitutional concerns regarding people having the freedom to be able to donate to a political party.
Godongwana acknowledged the fiscal constraints, saying “economic challenges and reduced revenue collection could limit the creation of a common public funding pool”.
Mathekga suggested adopting elements of the United States’ Political Action Committees system, where strict regulations govern fund usage.
“It is not a perfect system but you cannot buy your boyfriend or girlfriend flowers with the money that is being donated.”
He called for clear expenditure guidelines to strengthen political parties and restore credibility, warning that ,without robust accountability, public funding risks alienating voters further.
“The voters vote and they go away. Political parties, the legislators, it’s almost like they are voting for their own increase,” he said. “It feels like the public is being held ransom because it’s not like they’ve run a referendum on this.”
My Vote Counts filed papers to challenge the Political Party Funding Act’s limitations in the Western Cape high court in February, arguing that it fails to ensure transparency or curb undue influence.
“We challenged the constitutionality of several parts of the party funding act,” Bregman said.
My Vote Counts asked for an order declaring that:
• Political parties and independents are obliged to disclose all private donations, regardless of the amount;
• Both natural and juristic persons must disclose donations in excess of the annual threshold;
• The annual upper donation limit of R15 million be significantly lowered;
• Cumulative donations made by related donors be regulated and limited;
• Political parties and independents must disclose the expenditure of all private donations; and
• The presidential powers to determine the threshold and annual upper limit be restricted
“It’s basically that the law doesn’t go far enough to provide transparency and to limit undue influence and that the president’s powers in relation to the law are too wide,” Bregman said.
The organisation is awaiting judgment.
The treasury had not responded to the Mail & Guardian’s questions regarding the disbursement and transparency required for parties that receive a portion of the R1.1 billion by the time of publication.