Democracy for Sale? The Need for Transparency in Political Party Funding

Transparency in political party funding, particularly from private sources, remains a divisive topic in South African politics. Recently, Dr Mamphela Ramphele, leader of the newly-formed Agang South Africa, made a bold move and revealed her personal wealth. Her intention was to demonstrate that, unlike many other politicians, she believes in transparency and accountability. While this may be a laudable initiative by her as an individual, she did not divulge who was funding her political party. Interestingly, one of the few issues that all political parties agree on in South Africa is that they should not be forced to reveal their private sources of funding.

South African political parties receive funding from the taxpayer according to the proportion of votes that they receive. This funding is regulated by the Public Funding of Represented Political Parties Act 103 of 1997 and the amounts allocated to each party are publicly available. In the 2012–2013 financial year, for instance, the African National Congress (ANC), as the party with the greatest number of seats in parliament, received R69 million of the R104.8 million earmarked for all 14 political parties that hold seats in parliament. The notice for the 2013–2014 financial year as published in the Government Gazette on 5 April 2013 increased the allocation for all political parties to R114.8 million. However, this is relatively small change compared to the amounts that some political parties potentially receive from private sources.

But why is it important that private funding to political parties be transparent?

The problem is that, as long as private contributions are kept hidden and unregulated, it is possible for narrow private interests, such as those of corporations and wealthy individuals, to exercise undue influence over political parties. It would be problematic if private individuals and companies were to receive government tenders in exchange for such funding, as this puts paid to the ethos of free and fair competitive bidding for government contracts. The consequence is that the state is likely to pay for sub-standard work and those who suffer the most are the poor, who rely on government services.

Some analysts argue that unregulated private funding of political parties is dangerous as it provides avenues for parties to advance the narrow sectoral interests of individuals and corporations, both local and foreign, to the detriment of the wider electorate. In the long-term this leads to voter apathy and democracy suffers. Those who are unable to make large contributions to political parties’ coffers will start to withdraw from participation in democratic activities if they feel that the interests of the wealthy elite are primarily being served.

Democracy thrives when all the eligible citizens of a country are able to vote and participate in a range of political activities. It can be argued that when the law doesn’t compel parties to publicly declare how much they received from private individuals and corporations, the door is wide open to corruption, at the expense of democracy and accountability.

Furthermore, wealthy foreign countries or powerful multi-national corporations could interfere with a country’s sovereignty by funding the efforts of a political party to obtain or maintain power, in exchange for access to natural resources through mining rights, for example. Such a situation benefits a small clique of political and economic elites and is contrary to the interests of the broader electorate, particularly the poor, who depend on the state to protect their interests.

Across the globe, countries grapple with the issue of the governance of private funding for political parties. Some countries compel full disclosure of all amounts, while others require only partial disclosure as to the amount and source of funding. In Mali, for instance, foreign donations are illegal, but the law is silent on issues such as disclosure of local sources. While foreign donations are also banned in Ghana, the law does address the issue of disclosure.

The German constitution requires political parties to publicly account for all sources of revenue and the use of these funds. In Sweden, on the other hand, there is no legal requirement for parties to publicly divulge their sources of funding. Yet, in 1980 there was a voluntary agreement that all parties should, on an annual basis, share their income and expenditure details and make these available to others on request.

South Africa has dropped from a ranking of 38 in 2001 to 69 in 2012 on Transparency International’s Corruption Perceptions Index. This is but one of a number of surveys revealing that South Africans are losing trust in their government and political parties, which is not surprising given that the Public Service Commission estimates a loss of R1 billion to public sector corruption in the 2012–2013 financial year.

Given the gloomy picture painted by these indicators, the country has an opportunity to demonstrate its commitment to tackling corruption by opening political party funding to public scrutiny. A new law to ensure transparency in political party funding would be one option in the long term. Indeed, political parties agreed to enact such a law when the Institute for Democracy in South Africa (IDASA) brought this issue before the Constitutional Court. It is about time that our political parties adhere to their promises if they want to build public trust.

What is required in the short term, however, is a binding commitment to transparency by all political parties and creative approaches to putting funding information into the public domain.

Hamadziripi Tamukamoyo, Researcher, Governance, Crime and Justice Division, ISS Pretoria. This ISS Today first appeared in The New Age newspaper.

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