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South Africa’s Political Party Funding Act, enacted in January 2019, will, once implemented, regulate the manner in which political parties raise funds, including from private donors.  Under the Act, political parties generally are barred from accepting donations from foreign sources.  However, the Act permits a political party to accept a foreign donation if it is made for the purpose of training and skills development of the party’s members or assistance toward policy development of the party and if it does not exceed US$344,360 in value.    

When a foreign government, its agencies, or a foreign person or entity makes an allowable donation to a political party above US$6,885 in value, both the donor and the party must disclose the donation to the Electoral Commission, which must publish the information.

Although the Act permits the Commission to accept private donations to disperse to qualifying parties, the Commission is prohibited from accepting donations from a foreign government or its agencies.    

Accepting donations from a foreign source in violation of the Political Party Funding Act constitutes an offense punishable by a fine, a custodial sentence, or both.

I. Introduction

The “funding for political parties” clause of the South African Constitution provides for the public funding of political parties, stating that “[t]o enhance multi-party democracy, national legislation must provide for the funding of political parties participating in national and provincial legislatures on an equitable and proportional basis.”[1]  On the basis of this clause, the country’s Parliament enacted the Public Funding of Represented Political Parties Act in 1997.  This law and its subsidiary legislation regulate various aspects of public funding of political parties, including the manner in which public funds are allocated to each qualifying party and dispersed.

Although private funding of political parties has remained unregulated, this will soon change.  In a 2018 decision, the Constitutional Court upheld a Western Cape Division of the High Court judgment, which declared unconstitutional the Promotion of Access to Information Act of 2000 “to the extent of its inconsistency with the Constitution by failing to provide for the recordal, preservation and reasonable disclosure of information on the private funding of political parties and independent candidates” and ordered Parliament to amend the Act.[2]  More recently, in January 2019, South Africa enacted the Political Party Funding Act to repeal the Public Funding of Represented Political Parties Act of 1997 and regulate the public and private funding of political parties, among other reforms.[3]  Its implementation has been postponed pending the conclusion of drafting its subsidiary legislation.[4]  This report describes the restrictions this Act is intended to impose, particularly with regard to donations made to political parties from foreign sources. 

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II. Political Party Funding Act

A. Restriction on Direct Foreign Donation

Once implemented, the Act will preclude political parties from accepting donations from foreign governments or their agencies as well as foreign persons or entities.[5]  A foreign person is a person or entity that is not a citizen or permanent resident of South Africa or a company or trust not registered in South Africa.[6]  A draft regulation for the Act defines the term ”foreign entity” (interchangeable with foreign agency) as a body “incorporated and registered outside of the Republic irrespective of whether it is . . . [a] profit, or non-profit [e]ntity . . . or [c]arrying on business or non-profit activities, as the case may be, within the Republic.”[7]

A “donation” includes an in-kind donation, but it excludes a membership fee or other fees imposed by a political party on its elected representatives.[8]  It also excludes appropriated funds made available to political parties by national or provincial legislative bodies.[9]  In-kind donations include

. . .

(i)     any money lent to the political party other than on commercial terms;

(ii)   any money paid on behalf of the political party for any expenses incurred directly or indirectly by that political party;

(iii)  the provision of assets, services or facilities for the use or benefit of a political party other than on commercial terms; or

(iv)  a sponsorship provided to the political party . . . [10]

“Services rendered personally by a volunteer” do not fall within the definition of in-kind donations.[11]

An exception to this rule allows political parties to accept a donation from a foreign entity if such a donation is made for the purpose of “training or skills development of a member of a political party . . . or policy development by a political party.”[12]  However, the donation may not exceed the equivalent of South African Rand ZA5,000,000 (about US$344,360) in value.[13]

B. Restriction on Indirect Foreign Donation 

Private persons and entities may contribute indirectly to political parties through the Multi-Party Democracy Fund, one of the sources of funding for political parties administered by the Electoral Commission as part of the public funding of political parties plan.[14]  In addition to other restrictions that apply, the Commission is barred from receiving donations from foreign governments or their agencies for this fund.[15] 

Among other reasons, the Draft Regulation for the Act enables the Commission to return a donation made to the fund “should the Commission be of the belief, or have reason to believe, or suspect, or have reason to suspect” that it originated from a foreign government or foreign agency.[16]

C. Prohibition against Donations to Individual Political Party Members

The Act bars any person or entity, including foreign persons and entities, from conveying a donation to an individual member of a political party unless the donation is meant for the party’s political purpose.[17]  A member of a political party may only receive such donations if done on behalf of the party.[18]

D. Disclosure Requirements

A political party is required by law to disclose to the Electoral Commission any donation, including a donation from foreign sources permitted under the rules, that is  above the prescribed threshold of ZA100,000 (about US$6,885) within any financial year.[19]  Similarly, all entities that make donations to a political party that are above the prescribed threshold must also disclose such donations to the Commission.[20]  The Commission must publish such information quarterly.[21]

E. Transparency

Political parties are required to account for all donated money.  The Act states that a political party must:

(a) deposit all donations received by that political party, membership fees and levies imposed by the political party on its representatives into an account with a bank . . . in that political party’s name;
(b) keep a separate account with a bank into which all money allocated to it from the
Funds must be deposited;
(c) appoint an office-bearer or official of that political party as its accounting officer; and
(d) appoint an auditor registered and practising as such . . . to audit its books and financial statements.[22]

The accounting officer must prepare a statement showing all donations and membership fees, and any levy imposed by the political party on its elected representatives during that financial year and submit it to the auditor.[23]  Upon receiving the statement, the auditor must perform an audit and “express an opinion” on a number of items, including whether any of the money received by the political party came from a foreign government, entity, or agency.[24]  The auditor must then submit the opinion and the audited financial statement to the Commission.[25]

F. Enforcement

The Commission has a broad monitoring, inspection, and investigative mandate to ensure that political parties comply with all of their legal obligations.  It can do this in part by evaluating the information and documentation submitted to it by political parties.[26]  Importantly, as part of its mandate to monitor compliance and investigate complaints, the Commission may request anyone

(a) to disclose any relevant information;
(b) to produce, in whatever form, any relevant books, records, reports and other documentation;
(c)  for permission to—
(i)  enter any premises during ordinary working hours to inspect any relevant book, record, report and other document; or
(ii) copy or store in any format, any information, books, records, reports or other documentation produced in terms of paragraph (b) or discovered in terms of paragraph (c)(i); or
(d)  to answer a question about any relevant information.[27]

If a person refuses its request, the Commission may petition the Electoral Court for an order to compel the person to do so.[28]  If the Commission receives a complaint relating to the income or expenditures of a political party and it “is of the view that there is prima facie substance to the complaint,” it is required by law to conduct an investigation.[29]

When a political party fails to comply with the Act, the commission has a number of tools at its disposal, including: the power to issue directions, the power to suspend payment to a political party from the relevant funds, the power to recover money irregularly accepted or spent, and the power to institute proceedings for imposition of administrative fines before the Electoral Court.[30]

G. Offenses and Penalties

Anyone who accepts a donation from a foreign government, foreign government agencies, or foreign persons or entities in violation of the Act commits an offense punishable by a fine of up to ZA5,000,000 (about US$69,119) depending on the person’s past behavior, a prison term not exceeding five years, or both.[31]

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Hanibal Goitom
Chief, Foreign, Comparative, and International Division I
August 2019


[1] S. Afr. Const., 1996 § 236, available on the South Africa government website, https://www.gov.za/ documents/constitution-republic-south-africa-1996-chapter-14-general-provisions#236, archived at https://perma.cc/4D8G-MED2.

[2] My Vote Counts v. Minister of Justice, 2018(5) SA 380 (CC) para. 91, available on the Southern African Legal Information Institute (SAFLII) website, at http://www.saflii.org/ za/cases/ZACC/2018/17.pdf, archived at https://perma.cc/JLT5-VPU5.   

[3] Political Party Funding Act No. 6 of 2018 (Jan. 23, 2019), available on the South African government website, at https://www.gov.za/sites/default/files/ gcis_document/201901/ 42188gon63politicalpartyfundingact 6of2019.pdf, archived at https://perma.cc/B759-8NZH.   

[4] Electoral Commission Postpones Commencement of Political Party Funding Act, South Africa Government (Apr. 3, 2019), available at https://www.gov.za/speeches/electoral-commission-postpones-commencement-political-party-funding-act%C2%A0-3-apr-2019-0000, archived at https://perma.cc/EH4X-KZSB

[5] Political Party Funding Act § 8.

[6] Id. § 1.

[8] Political Party Funding Act § 1.

[9] Id.

[10] Id.

[11] Id.

[12] Id. § 8.

[13] Id. sched. 2, § 8.

[14] Id. § 3.

[15] Id.

[16] Draft Political Party Funding Regulations § 4.

[17] Id. § 9.

[18] Id.

[19] Id. §§ 9 & 24; Id. sched. 2, § 8.

[20] Id.

[21] Id.

[22] Id. § 12.

[23] Id.

[24] Id.

[25] Id. §§ 11 & 12.

[26] Id. § 14.

[27] Id.

[28] Id.

[29] Id.

[30] Id §§ 15-18.

[31] Id. § 19; Id. sched. 1.

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Last Updated: 12/30/2020