South Africa’s ruling party is broke and may be forced to lay off staff.
An official at Luthuli House, the ANC’s headquarters, told the Mail & Guardian that Africa’s oldest liberation movement was in such a dire financial situation that some workers had not received their salaries for more than two months, whereas others had been paid a week or two late over the past few months.
Other ANC insiders confirmed the party was planning to lay off almost half of its staff in a bid to cut costs.
Secretary general Gwede Mantashe this week admitted to the M&G that the party was struggling to make ends meet after a R20-million decrease in electoral funding when it lost 16 parliamentary seats in the May general elections.
It also lost 16 seats in five provincial legislatures (but gained three seats in three provinces).
Earlier this month, angry staff members confronted senior ANC leaders, demanding salary increases.
“We said to them: ‘Comrades, please bear with us … the ship is tight’,” Mantashe told the M&G. “When things turn around we will look at what option we have.”
The ANC has been unable to pay bonuses and salary increases partly owing to the shrinking of electoral funding, but also because the party has struggled to raise money from private funders over the past few years.
It now faces liquidation threats from suppliers who are owed millions of rands for services they rendered to the ANC.
The M&G spoke to six ANC staff members this week, who confirmed that the party was in financial trouble. They spoke on condition that their identities were not revealed.
Mantashe apparently told them during a stormy meeting at Luthuli House that the organisation was in dire financial straits and would not be able to increase their pay or give them bonuses.
A second official, who attended the meeting, said Mantashe told staff that those who were unhappy about the decision not to increase their salaries should go and look for alternative employment.
“He [Mantashe] told us that if we want an increase, we better walk out [of the ANC],” said the second Luthuli House official. “They [ANC leaders] told us we must bring our CVs so that they can take them to government to see if it can’t create employment for us. Many people here are demoralised. We have not been getting salary increases and annual bonuses for the past three years. Now we hear that they [ANC leaders] want to cut staff by half.”
Our source claimed that a group of veterans, some of whom have worked for the ANC for many years, have been identified as the first group to be retrenched.
However, the veterans were prepared to put up a fight, the ANC official said.
Although Mantashe said he rejected workers’ demand for salary increases and bonuses, he denied claims that the party was planning to retrench staff.
He said he informed staff that their continued demands for salary increases and bonuses may result in job cuts – a situation the party wanted to avoid. He denied claims that staff were told to leave the party at that meeting.
“We have not let go of a single staff member,” he said, adding that there was also no request for voluntary retrenchments.
Last year it was reported the ANC owed Blueprint Strategic Marketing Communications R10-million for work the company did for the party in the 2011 local government elections. (David Harrison, M&G)
Mantashe said the party would not be able to afford staff bonuses this year, the second time in a row. “Staff want an 18% increase … Increases are a function of affordability.”
He said he also did not receive a bonus or salary increase.
“Before I was a director at the Development Bank of Southern Africa and I understood I had to take a salary cut [when I joined the ANC as secretary general] … I knew it is my organisation and I have to put my energy and skill to the disposal of the ANC to be a better instrument of liberation.”
Hostile to the ANC
Although a senior Luthuli House official told the M&G that most private companies were hostile to the ANC, Mantashe said this was not the case: “We have more donors [now] … and those who had problems politically are coming back.”
A senior ANC Gauteng leader counted Black Economic Empowerment (BEE) companies as among those hostile to the ANC.
“They [some BEE companies] have raised concerns that big tenders, in sectors such as construction, are given to established white companies and those companies are not funding the ANC. Even during this year’s election, we struggled to raise funds. Our suspicion is that those white companies are funding the DA [Democratic Alliance].”
Asked about threats by a number of its suppliers to liquidate the ANC, Mantashe said he was not in a position to talk about that. “The relationship with my creditors are not for public consumption,” he said, adding that the ANC’s relationship with its creditors was “long term”.
Media reports last year indicated that the ANC still owed Blueprint Strategic Marketing Communications R10-million from the 2011 local government elections. It was reported that the company opted to go to court to get the money owed to it.
Attempts to contact the company for comment this week were unsuccessful.
Other reports indicated that the ANC had an unsettled debt of R29-million with Robert Gumede’s IT company Gijima. This was for installing computer systems that would be linked to constituency and parliamentary offices. Gijima would not say whether the ANC settled its debt.
Production company VWV took the ANC to court in 2012 after the party failed to settle its debt for a production staged at its centenary celebrations in 2012. The M&G reported last year that the ANC reached an out-of-court settlement with the company. – Additional reporting by Andisiwe Makinana