Introduction

Since our last newsletter in February, there have been several significant (and some very concerning) developments relating to money in politics and political funding in general, and the Political Funding Act (PFA) specifically. In the past four months alone, MVC’s court case challenging the constitutionality of the PFA was heard; Parliament voted to increase secrecy in political funding; the national budget was (finally) passed; the IEC’s annual report on political funding was published; and the final quarterly disclosures for the 2024/25 financial year were released.

A strong, egalitarian multi-party democracy depends on a competitive electoral arena that offers voters a wide range of effective political choices. Without proper funding, political parties cannot fulfil their crucial role in sustaining a multi-party democracy such as ours. Our Constitution recognises this fact and has mechanisms to ensure that represented parties receive significant funding from the public purse. Additionally, the PFA regulates the private funding of politics, and any party or independent, whether represented or not, can receive private donations from businesses and members of the public up to a prescribed annual limit. A recent report released by the IEC (more on this below) shows that in the 2023/24 reporting period, political parties together received more than R3bn in combined public and private funding.

Because such enormous amounts of money fuel the political system, regulations need to ensure that private interests cannot unduly influence parties through their donations, and that voters and the public know who funds politics and how parties spend their funds, through regular disclosures. Developing an effective system to regulate political financing requires ensuring that politics is properly funded on the one hand, but that parties are not beholden to their financial backers on the other.

This is a difficult balance to strike. That is why political funding consistently remains a site of intense contestation, as the past four months of developments demonstrate. Although a party’s success ought to be determined by the extent of its appeal to voters, it is an unavoidable reality that this depends to some degree on a party’s financial health. Recent developments indicate that parties are more concerned with the state of their bank accounts than the democracy they are supposed to be upholding.

MVC’s legal challenge to the PFA

Even before the PFA (then known as the Political Party Funding Act) was implemented in 2021, MVC had been critical of its provisions: it contained several loopholes, and did not go far enough to enhance transparency and accountability in private political funding. In May 2023, MVC launched an application in the Western Cape High Court challenging the constitutionality of several elements of the law.

Significant delays, as well as the amendment of the law in May 2024, resulted in our case only being heard in February 2025. The matter was argued before a full bench and heard over two days. The respondents were the President, Minister of Justice and Correctional Services, Minister of Home Affairs, the Independent Electoral Commission, political parties predominantly represented in the National Assembly, and Parliament itself.

Our application sought an order from the Court declaring that:

  1. political parties and independents are obliged to disclose all private donations, regardless of the amount;
  2. both natural and juristic persons are obliged to disclose donations they have made in excess of the annual threshold;
  3. the annual upper donation limit of R15 million be significantly lowered;
  4. cumulative donations made by related donors be regulated and limited;
  5. political parties and independents be required to disclose the expenditure of all private donations;
  6. the powers of the President to determine the disclosure threshold and annual upper donation limit be restricted and subject to more stringent guidelines; and
  7. private donations above the annual limit received between May and August 2024 are returned to donors and there is full disclosure for this period.

Judgment in the matter is still pending. The Court’s decision could dramatically transform the political funding landscape. If granted, the application will be a vital further step towards curbing elite influence over our politics, strengthening voter accountability over public representatives, and upholding the right to access the necessary information to exercise the right to vote. Regardless of the outcome, further court action is likely to follow, either in the form of appeals or a confirmation hearing before the Constitutional Court.

Portfolio Committee backs secrecy over accountability in political funding

Around the same time as MVC’s court case was being heard, a process was coming to a head in Parliament that could also impact the trajectory of the PFA. In April, Parliament’s Portfolio Committee on Home Affairs (“the Committee”) voted to double two crucial limits in the PFA: the disclosure threshold and donations cap, which were raised from R100,000 to R200,000 and R15 million to R30 million respectively. These two limits are central to the law, and whether they are lowered, maintained, or increased has a material impact on its effectiveness and strength.

Despite some objections from members (and from several organisations, including MVC, during the public participation process), when the Committee voted to adopt a report and resolution recommending the increase, it was passed unanimously. In passing the resolution, the Committee chose to disregard both relevant empirical considerations and the public interest, in favour of political expediency. Without providing reason, it ignored a detailed, evidence-based report prepared by the Parliamentary Budget Office (PBO), which warned that South Africa already exceeds global norms for private political donation limits. Crucially, the PBO’s report revealed that the original thresholds lacked a clear foundation and rationale. Doubling them without proper research only compounds this problem, but the Committee appeared to have no qualms with doing so.

The Committee’s adoption of the report and resolution to double the limits does not amend the law, but it is the first step towards doing so. Its irrational decision to resolve to double the limits has opened the door to undermining transparency and accountability and allowing greater private influence over our politics. At the time of the Committee’s decision in April, we publicly critiqued its process, and called on the National Assembly to reject the report and return it to the Committee.

National Assembly also in favour of watering down political funding regulations

As the next step in this process, the report adopted by the Committee was debated by the National Assembly (NA) in late May and adopted without change. Despite four political parties voting against the report, most parties, including the ANC and DA (who are the greatest recipients of both public and private political funding), supported it.

In its report prepared for the Committee, the PBO wrote that ‘[t]he analysis of international benchmarks shows that South Africa as a middle-income country is an outlier with [a] R15 million upper limit. In essence, this upper limit is more than that of some of the higher income nations…’ and further that, ‘[t]he international benchmarks analysis shows that it would be difficult to achieve some of the [PFA’s] objectives if Parliament is to set high (sic) than the current upper limit (R15 million + inflation) given the South African socioeconomic context’. The PBO recommended a more measured, transparent approach, grounded in socioeconomic data, to avoid undue influence over our politics.

Whether members of the NA actually read the PBO’s report, or simply chose to ignore it, is unclear. But in adopting the Committee’s report and recommendation to double the limits, it too is complicit in this irrational and unconstitutional process. The report is now before the President, who under the current law, has the final power to determine the disclosure threshold and donation limit. If the disclosure threshold is doubled, amounts of up to R200,000 can be donated without any public disclosure, meaning we will know less about who funds our politics. If the donation cap is doubled to R30 million, it will give donors even more opportunity to wield powerful influence over our parties. As our Whose Vote Counts Tool shows, a handful of donors already dominate the private funding landscape. Doubling the donation cap would further exacerbate this issue and ultimately limit the political offering available to voters.

Should the need arise, MVC will institute further litigation to ensure the PFA is constitutional, and that its regulatory framework is developed in accordance with a rational process that takes relevant evidence into account.

For a more detailed critique of the process in the National Assembly, read our media statement here.

The Budget is finally passed, with no increases for political funding

Represented parties receive public funding from Parliament, from provincial legislatures, and from a fund managed by the IEC known as the Represented Political Parties’ Fund (RPPF). In the Budget, funding through the RPPF barely increases over the next few financial years. This belies the passion with which parties spoke about the need for more funding during the parliamentary processes described above. If parties are indeed so desperate for additional funding, why did they accept a Budget that offers them a real-term reduction in public funding?

Below is the table (edited for brevity) taken from page 52 of the 2025 National Budget. The amount allocated to represented parties through the RPPF in 2022/23 was R342m, and R322m is the adjusted appropriation for 2024/25. The amount of R850m is an anomaly, because an additional amount was distributed to parties to allow them to prepare for the 2024 elections. But overall, the amounts remain relatively constant for the next few years, with an amount of R367m estimated for 2027/28.

One would expect that the parties supporting the increase to the donation limit on the basis that they need additional funding would also be pushing for more public funding. But it may be the case that parties would rather take funds from private sources, because there are no restrictions or conditions on how these funds are spent, and no requirement to report on the expenditure of these funds. This is in direct opposition to transparency and accountability, key tenets of democracy.

IEC releases third annual political funding report

Since the implementation of the PFA, the IEC has released an annual report on all political funding, encompassing private funding and all the different streams of public funding. The report provides a comprehensive overview of South Africa’s political funding landscape. In addition to information on the amounts received by parties from the state and donors, both represented and unrepresented, there is also data on how parties spend some of these funds, if they comply with various reporting obligations, and insight into partial audited financial statements.

The report also details other forms of income parties receive, which are often significant, and fall outside the scope of reporting or transparency requirements. The IEC report helps to tell the full story of a party’s financial situation but also highlights the flaws and weaknesses in our legislation, which hinder its ability to ensure transparency in political funding.

The IEC has just released its third such report, covering the 2023/24 financial year. We are busy studying the report and will be releasing a comprehensive analysis in the next month. For now, some of the key takeaways are:

  • Collectively, represented and unrepresented parties received more than R3,2bn in public and private funding (see graph below)

 

 

  • Combined, the ANC (R1,7bn) and the DA (R644m) received more than R2.3bn, or 73% of all funding, showing how concentrated funding is (see graph below)

Additionally:

  • private funding accounted for R1bn, while public funding accounted for almost R2,2bn.
  • The ANC declared R413m in ‘Other income (outside the ambit of the Act)’, accounting for almost 80% of all its private funding. But there are no details about the source of these funds.
  • Despite it being an election period, the DA failed to spend more than R40m of its IEC allocation.
  • In the reporting period, there were 596 represented and unrepresented parties registered with the IEC. Only a fraction of these complied with the financial reporting requirements.

Last quarterly disclosure for 2024/25 for the PFA

Under the PFA, parties need to disclose all private donations they received over R100,000 to the IEC. The disclosure information is then published quarterly. In May, the IEC released the quarterly disclosure report covering the months of January, February, and March 2025. Only R14m in donations above the disclosure threshold was reported.

With exactly four years of disclosure data, our Tool shows us that there has been R840m in private donations above the threshold to date. We can begin to see trends in private funding. As we demonstrated in our presentation to Parliament during the public participation process on the disclosure threshold and upper limit, a handful of powerful donors are responsible for the majority of private funds parties receive. This was echoed in the PBO’s report as it found that ‘[w]ealthy donors like the Oppenheimer family and corporations such as Batho Batho Trust are significantly shaping political funding. For example, the DA and ANC both benefited from large, targeted contributions, suggesting donors may influence policy priorities’.

There have been more than 350 donations disclosed since the PFA’s implementation. If the disclosure threshold is doubled, and was applied retrospectively, more than 90 of these donations would not have been disclosed. In our court case we argued that there needs to be full transparency – all donations, no matter the amount, should be disclosed. We also argue that, in the event the Court finds no issue with Parliament’s decision to legislate a disclosure threshold, it needs to be based on evidence and align with South Africa’s socio-economic context.

What’s next?

With the decision to determine the two crucial limits currently under consideration by the President, and the judgment in our court case still pending, the next few months will shape the immediate future of the PFA in a profound way. But this is just one part of the bigger picture. Private funding, which is regulated by the PFA, represents less than one third of all funding based on the most recent data. When we consider how best to regulate political funding, how parties should be funded, what levels of transparency are required, and a myriad other considerations, we need to approach the topic holistically and ensure that the rights and priorities of political parties and donors do not trump those of the public or undermine the democracy that so many fought for.

Submitted by Joel Bregman

Project Lead: Money in Politics