Political parties should be funded from the fiscus to avoid their being dictated to by “unscrupulous donors” and manipulated by domestic or foreign capital.
This is according to the ANC’s financial report, that is expected to be tabled today at the party’s 54th national conference in Johannesburg.
NEC members who briefed City Press on the report said it was compiled by outgoing treasurer-general Zweli Mkhize.
The report states that the ANC is:
- R47m in the red and is struggling to contain costs arising from elections and a large staff complement;
- Battling to pare down R255m in historic debt;
- Hit with lawsuits from service providers and has paid R68m in settlements; and
- Still fighting claims amounting to R27m.
Mkhize’s report paints a bleak picture of the ANC’s finances, despite improved fundraising efforts.
It also contains warnings of tougher conditions ahead as a result of the sluggish economy, which is now being battered by ratings agency downgrades.
In his introduction to the report, Mkhize reveals that the ANC is 65% dependent on fundraising and donor funding for its operations and activities, making it vulnerable in the current economic climate.
He admits that the perceived political uncertainty by business and labour, and the downgrades of South Africa’s credit rating by international credit agencies are putting pressure on economic growth and hampering fundraising opportunities.
“This does not bode well for future fundraising initiatives and presents a major risk to the ANC’s financial stability and cash flow that must be mitigated,” he says.
Mkhize says the ANC’s staff numbers are too high.
“Even though we experienced a gradual decline in the number of employees from 2013 to 2015, the number of employees started to rise again mainly because of the leagues, provinces and regions filling vacant posts,” he says.
“The salary cost is a major cost driver and normally accounts for 40% of the operations cost. The salary cost has increased by R28.8m in the past five years.”
Mkhize, the party’s outgoing treasurer-general, also warns that the goodwill that underpinned the ANC’s successful fundraising efforts over the past century has been from members and supporters who backed its cause – but this goodwill is under threat.
“Such challenges of infighting, factionalism, misconduct and ill discipline, [along with] perceptions of corruption, arrogance and various other ills, have a negative effect on the support the ANC receives.”
With regard to the issue of reducing dependence on donor funding in South Africa’s political party system, Mkhize says there have been recent examples of donors subverting the will of voters by “dictating terms to some parties, creating distortions as those parties exercise their policy choices”.
This makes it important for South Africa to free itself of this possibility by funding parties from the fiscus.
“That way, the control of the political parties in South Africa remains securely in the hands of South African people,” he says.