In a historic political development in South Africa, the Political Party Funding Act came into operation on 1 April 2021. President Cyril Ramaphosa signed the Act into law on 22 January 2019 and promulgated it in February this year. The Act regulates public and private funding of political parties with the aim of establishing public trust. Before this Act, the relevant legislation was the Public Funding of Represented Political Parties Act 103 of 1997.
The implementation of the Political Party Funding Act will have far-reaching consequences for ethical-political activity. Whether these changes will strengthen the confidence of citizens in the democratic political process and enable them to assert their right to information will be seen in its implementation. How this Act will impact digital fundraising is also yet to be seen in the next cycle of elections happening in October 2021.
WHAT ARE THE MAJOR IMPLICATIONS OF THE ACT?
The Act establishes funds to provide political parties represented in Parliament and legislatures with funding to undertake their work. It also requires that donations be disclosed by parties and donors to the Independent Electoral Commission (IEC).
At the same time, through the establishment of the Represented Political Party Fund, which provides public funding to parties, and the Multi-Party Democracy Fund, which funds parties from private sources, the Act seeks to ensure that all represented political parties receive sufficient funds for their work in a fair and equitable manner. The Multiparty Democracy Fund will accept private contributions and disburse these to political parties represented in the national and provincial legislatures.
Who is allowed to make donations to political parties? Subject to certain conditions, any local or foreign person can donate but the following entities cannot: foreign governments or foreign government agencies, organs of state or state-owned enterprises. Private foreign entities can only make direct donations to political parties up to a maximum of R5 million and specifically for training or skills development of a member of a political party, or policy development by a political party.
Donations from R100,000 and upwards must be disclosed and the Act also prohibits a political party member from receiving a donation other than on behalf of a political party or for political party purposes. Political parties may not accept donations above R15-million from a single donor.
The Act mandates the Independent Electoral Commission to publish the donations disclosed to it on a quarterly basis. The act also requires political parties represented in the National Assembly and provincial legislatures to submit audited financial statements for funding received from the Represented Political Party Fund and the Multi-Party Democracy Fund.
WHY IS THIS ACT IMPORTANT?
The Political Party Funding Act is an important piece of legislation for at least three reasons.
It provides the South African electorate with knowledge about the private funding of political parties, information that the Constitutional Court has declared to be integral to the fulfillment of the right to vote.
The transparency about the private funders of political parties will assist in the fight against graft. It is the nexus between money and politics, secretive transactions that undermine fundamental constitutional principles of accountability and openness, that has allowed corruption to flourish.
The enhanced transparency and the clean-up of South African politics will engender greater confidence in politics and in democracy itself. There have been lower levels of participation in elections and voter turnout has dropped. Most concerning is that young people are shunning elections. For the 2019 national and provincial elections, about nine million people did not even register to vote, and of these, six million were aged between 18 and 29. Less than 50% of eligible voters voted in those elections.
HOW DOES THE ACT IMPACT DIGITAL FUNDRAISING?
One clear arena that will require much focus is that of digital campaigning and the use of social media platforms. It is exceedingly difficult, if not impossible in some instances, to track social media donations by individual politicians.
Social media has changed the game, allowing incumbents and newcomers alike to speak directly to constituents on everything from policy to what they had for dinner. It has especially opened up new doors for young politicians, who have been able to skip the filter of traditional media.
Donations made online usually made directly to individual politicians and not to political parties.
Data on the implications of digital fundraising on politics, in general, is somewhat lagging in South Africa, and even Africa broadly, as compared to other regions and is still in its infancy. One key factor to consider is how Africa is a leading adopter of digital finance and more specifically mobile money. Several young politicians interviewed said they received mobile money donations from constituents largely generated from digital and social media interactions.
The current legislation does not specifically speak to money raised from social media campaigning for individual politicians. Most of the contributions from online campaigning are small contributions of between R65 ($5) and R1400 ($100), which are unlikely to compare to the larger institutional donations and are not mandated under the Act to be disclosed.
Social media is changing the way in which political communication is happening but it will undoubtedly also impact the way fundraising is done in politics.