On 22 January 2021, President Cyril Ramaphosa signed the proclamation confirming that the Political Party Funding Act 6 of 2018 (PPFA) will come into operation on 1 April 2021. The PPFA, signed into law on 23 January 2019, regulates among other things the public and private funding of political parties and the establishment and management of funds for represented political parties. The PFFA further seeks to prohibit certain donations made directly to political parties, regulate the disclosure of donations accepted, and determine the duties of political parties in respect of funding.
Through the PFFA, two funds are set to be established and managed:
- The Represented Political Party Fund: established to enhance a multi-party democracy by providing for the funding of represented political parties.
- The Multi-Party Democracy Fund: established for funding represented political parties from private sources.
When the PFFA comes into effect a political party will be prohibited from accepting donations from:
- Foreign governments or foreign government agencies.
- Foreign persons or entities, unless it is for training or skills development of a member of a political party or policy development by a political party, and falls within the prescribed amount within a financial year.
- Organs of state.
- State-owned enterprises.
Further to this, a political party may not accept a donation that it knows or ought reasonably to have known, or suspected, originates from the proceeds of crime. Political parties must report such knowledge or suspicion to the Independent Electoral Commission for South Africa (IEC). A political party may also not accept a donation from a person or entity in excess of the prescribed amount within a financial year. The threshold is R100 000.00 within a financial year. No person or entity may deliver a donation to a member of a political party other than for party political purposes.
As of 1 April 2021, political parties will be required to disclose to the IEC all donations received above the prescribed threshold. The IEC must monitor compliance by political parties with the PFFA. Administrative fines and offences and penalties may be imposed for political parties who contravene the PFFA.
The Independent Electoral Commission for South Africa (IEC) has welcomed the coming into effect of the PFFA, stating that this is “one of the most important and far-reaching enhancements to our electoral democracy in the past 25 years. It will contribute significantly to increased transparency, good governance and access to information which will ultimately enhance the credibility of the electoral process.”
It is necessary to note that the Promotion of Access to Information Amendment Act 31 of 2019 (PAIA Amendment Act) is connected to the PFFA. The PAIA Amendment Act provides for information on the private funding of political parties and independent candidates to be recorded, preserved, and made available. The PAIA Amendment Act will come into operation on a date to be determined by the President.
The press statement issued by the Presidency is accessible here.
The Political Party Funding Act 6 of 2018 is accessible here.
Please note: The information contained in this note is for general guidance on matters of interest, and does not constitute legal advice. For any enquiries, please contact us at [email protected].