Financial report: Skyrocketing operational costs will lead to bankruptcy, warns Phosa

2012-12-18 00:00

THE ANC risked bankruptcy if it did not curb its high operational costs, outgoing treasurer-general Mathews Phosa has warned.

This is despite the fact that the ANC raised R1,49 billion between January 2008 and October 2012, according to a report.

Of the total amount raised, a whopping R1,06 billion, which translates to 72%, came from fundraising.

A further R218 million (15%) came from the party’s share of the Independent Electoral Commission grant to political parties represented in Parliament.

A further R55,7 million (four percent) came from levies, while membership feeds totalled R44,9 million (three percent).

The ANC’s Progressive Business Forum netted the ANC R88,5 million (six percent), while R14,6 million was “other income”, the report states.

From the report it appears the party spends most of its money on salaries.

The report on the party’s financial position comes after reports that it was battling to pay its creditors.

Weekend newspapers reported that a company wanted the ANC liquidated after it allegedly failed to pay it for a centenary concert that was rained out in Mangaung.

Phosa warned that the ANC’s financial performance has been characterised by sharp rise in operational and event costs.

The costs in salaries, travel and accommodation had grown by 125% during the five years under review. The salary bill stood at R130,7 million in March 2012.

Phosa said despite the growth in revenue by R193 million, from R147 million in 2007/8 to R340 million in 2011/12, costs had grown by R275 million, from R162 million in 2007/8 to R437 million in the same period.

“These high increases in costs are alarming and unsustainable. For the movement to sustain itself, it has to reduce operational costs drastically,” Phosa said.

This required commitment from the ANC’s leadership to significantly reduce the number of employees and also conduct a skills audit. He also complained about multiple big events in close proximity, resulting in a dent in the party’s purse.

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