Donors to SA political parties less generous out of election season, latest disclosures suggest

Only two South African political parties have disclosed receiving donations of more than R100,000 in the period between January and March 2022: the ANC and the DA.

The ANC registered the largest donation during these three months, of R10-million, from the mining company United Manganese of Kalahari (UMK).

As we have previously observed, the majority of donations to the ANC over the 2021/2022 financial year has come from sources linked to the party. The latest R10-million donation from UMK is no exception: the ANC’s investment arm, Chancellor House, is one of the BEE investors in UMK.

More controversially, Russian oligarch Viktor Vekselberg also holds an indirect stake in UMK. In response to questions from News24 in March, the company clarified that the limited nature of Vekselberg’s holding does not violate US, UK or EU sanctions.  

This is not the first time that UMK, which mines manganese in the Northern Cape, has bailed out the ANC. In the first set of donation disclosures for the 2021/22 financial year, it was revealed that UMK donated R5-million to the ANC, while its majority shareholder Majestic Silver Trading 40 chipped in a further R2,500,000.

The DA brought in donations of R2,525,387.72 over the final quarter, with the majority coming from German organisation the Friedrich Naumann Foundation (FNF) and the Danish Liberal Democracy Programme.

The DA has previously declared other donations from FNF. The addition of the Danish Liberal Democracy Programme to the DA’s list of donors suggests that the opposition party has pretty much cornered the market when it comes to attracting funding from northern European liberal pro-democracy groups. The Electoral Commission of SA (IEC) has confirmed that all foreign donations declared by the DA thus far have been compliant with the political party funding legislation, which puts a cap of R5-million on foreign donations to a single party.

Only one local donor boosted the DA’s coffers over the most recent financial quarter: Polyoak Packaging, a Cape Town-headquartered packaging company, gave the party R120,000.

And that was it. No other political party has registered a donation of more than R100,000 between January and March 2022.

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The next legal requirement is that parties must submit audited financial statements – prepared by independent auditors – to the IEC by 30 September 2022.

Releasing the most recent funding disclosures on Monday, the IEC noted that it is “currently on a national roadshow to assist registered political parties with training on the preparation and submission of audited financial statements”, which suggests the body foresees some degree of non-compliance.

Questions continue to hang in the air about whether local parties are scrupulously disclosing donations, as is now required by law. Parties such as the EFF and the FF Plus have thus far declared donations in only one financial quarter: October to December 2021. The ANC and the DA are the only parties to have disclosed donations in all four quarters of 2021/22.

But the sudden drought in large political donations over the first months of 2022 is plausible, for the reason identified by chief electoral officer Sy Mamabolo: “The more imminent the elections, the more likely that parties will receive significant donations.”

It is much easier to make a compelling appeal to sympathetic political donors when an election is around the corner and parties’ financial needs are urgent, in order to mount impactful campaigns. With the majority of third-quarter political party donations registered as having landed in the immediate build-up to the 2021 local government elections, it is quite likely that some donors regarded their duties as having been already discharged.

Other donors had already reached the maximum amount they could donate to a single party over one financial year – R15-million – within the first three quarters. Oppenheimer heiress Mary Slack and tech mogul Martin Moshal, for instance, reached the limit of their permitted donations to the DA within the first two quarters.

One might also ask whether another possible reason for the precipitous drop in political donations after the 2021 local elections might lie in some donors being dissatisfied with their chosen parties’ electoral performance. Herman Mashaba’s ActionSA raked in millions up to the elections, but most recently had nothing to disclose. Did its pre-election donors consider the party’s 1.8% performance nationally an inadequate return on investment, and might they also have been turned off by ActionSA’s post-election leadership turmoil?

Looking at cumulative donations declared over all four quarters of the 2021/22 financial year, the ANC topped the leaderboard with about R100-million. In second place is the DA, bringing in just more than R80-million in total. Third is ActionSA, which disclosed donations amounting to about R24.5-million. (For all three parties, some donations were “in-kind” rather than monetary. Also note that only donations greater than R100,000 have to be disclosed, meaning that any party could have received substantial amounts in smaller individual donations.)

If we assume that ActionSA’s impressive donations haul last year was largely as a result of the buzz that accompanies a new political contender, and if we further assume – quite possibly naively – that the disclosures are accurate, what the first year of donation records suggest is that, in financial terms, South African politics remains in effect a two-horse race between the ANC and the DA.

But as previously noted, the majority of ANC donations over the past year have stemmed from sources closely linked to the party: financial vehicles Chancellor House and Batho Batho; President Cyril Ramaphosa himself; and Ramaphosa’s brother-in-law, Patrice Motsepe.

Without these sources, in fact, the ANC would have brought in less than R10-million in donations above the R100,000 reporting threshold for the entire financial year.

It is the DA, in other words, that has established itself as the South African political party most capable of attracting high-value external donations. But with the DA also having underperformed in the 2021 local polls – as the party admitted when it placed its Johannesburg region under administration in May – it remains to be seen whether its donors keep the faith. DM 

UPDATE: This article originally stated that German organisation Konrad-Adenauer-Stiftung (KAS) had previously made a donation to the DA. This was incorrect: KAS previously donated to Action SA.

 

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