Why business should help fund the ANC. And also why it shouldn't.

At the African National Congress's 103th birthday celebrations recently President Jacob Zuma called on business to support the ANC.

He told 2500 guests in Cape Town that entrenching democracy is getting pricey in South Africa and that the party needed the support of the business sector.

While this practice is very controversial - it inevitably leads to questions about level playing fields and preferential treatment in the awarding of Government tenders - this isn't the first time Zuma has raised the issue in public. And he isn't the first President to press business for funding either.

Speaking on The Money Show, political commentator Prof Sipho Seepe recalled the late President Nelson Mandela doing the same thing...

Nelson Mandela was one of those people who the business people will tell you that every meeting that ends - it ends with him soliciting funds.

Prof Sipho Seepe

Indeed, many leading business men and women recall being taken aside by Madiba asking for support for some or other project close to his heart.

So why the concern when Jacob Zuma does it?

“It must be strong financially, not so? So I always appeal... just one cheque. Just sign and give it to the treasurer-general… Give us figures but not more than six.” Zuma went on to say: “You must know that if the ANC at any point can be weaker, your business will be weaker… For your business to be strong, make the ANC strong… you must invest wisely.”

President Jacob Zuma

Bruce feels using the podium at a birthday celebration "crass", and "smacking of desperation". Prof Seepe is more relieved that Zuma's call was made transparently, in public. But despite the transparency of the call, Seepe would like to see formal legislation around these practices.

He makes the point that being short of money is one thing, but if the ANC was found to be sitting on piles of cash might make the electorate even more suspicious.

In her Daily Maverick column about the birthday celebrations Ranjeni Munusamy referred to the appeal containing "a hint of extortion". When asked if he agreed, Seepe responded by first focussing on how legislation should protect businesses in this situation...

I think what business should be doing is saying let's adopt the system which has been proposed - of making sure that procurements in Government follow PFMA (Public Funding Management Act) stipulations. Then you cannot have a Government that will extort because dealings with be transparent.

Prof Sipho Seepe

Private funding of political parties is a contentious issue in South African politics, with no applicable legislation existing that regulates the conduct of political parties in relation to private donations and funding. The only mention of private funding of political parties in the relevant legislation simply states that this practice is permitted in South Africa. However, no conditions are attached to the receipt of such contributions.

Extracted from: Susan Booysen & Grant Masterson 2009 "Chapter 11: South Africa" IN Denis Kadima and Susan Booysen (eds) Compendium of Elections in Southern Africa 1989-2009: 20 Years of Multiparty Democracy, EISA, Johannesburg, 399-402.

Listen to Bruce's chat with Prof Sipho Seepe here....

Following Bruce's chat with Sipho Seepe, Lorenzo Fioramonti, Professor of Political Economy at the University of Pretoria gave Bruce five reasons why he believes companies should NOT fund political parties.

Not only does he believe these practices reduce the capacity of public authorities to regulate the market - regulations which favour competition and excellence - Fioramonti says Political Party funding all over the world has become a hinderance to business innovation...

The key is not whether you are innovative or not, whether you are a good business or not. The key becomes whether you are connected to power - and this is exactly the opposite of what good business would like to achieve.

Prof Lorenzo Fioramonti

Quoting Germany as an example of another relatively young democracy with innovative business sector, Prof Fioramonti highlights the need for a system of public funding with public scrutiny... In that country, as in the United States, records of donations are open for all to see, and that lowers the risk of abuse.

_In South Africa an application by IDASA to have all donations to political parties be made public was unsuccessful. However, as recently as 2012, the organisation's Judith February wrote this column on the need for legislation.

Fioramonti maintains that most big earners on the African continent are making money from connections to state institutions - access to political power - rather than more sustainable growth of a private sector through innovation, though development of unique products that are useful.

The debate about legislation around this sort of funding is bound to go on for some time. In the meantime, while neither the ruling party nor the opposition like to be bundled together, Fioramonti says both could do more with what they have:

I think good politics and good governance can be much cheaper than it is at the moment!

Prof Lorenzo Fioramonti

Listen to the full interview here...


This article first appeared on 702 : Why business should help fund the ANC. And also why it shouldn't.


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