On April 1, 2021, South Africa enacts the Political Party Funding Act , which aims to promote transparency and accountability in political party funding while also ensuring their independence through the prohibition of certain foreign donations.
Under the Act, political parties are required to disclose to the Electoral Commission all donations (i.e. money, provision of assets, services or facilities, and sponsorship) received above the prescribed threshold of R100,000 within a financial year. The Commission will then publish these disclosed donations on a quarterly basis.
Political parties are prohibited to accept more than fifteen million rand in donations from a person or entity in a financial year.
Political parties are also prohibited from accepting donations from foreign governments or foreign government agencies, organs of state, state-owned enterprises, foreign persons or entities, or donations derived from the proceeds of crime.
Donations from foreign entities are permitted under the Act, but only for the purpose of training or skill development of a member of a political party, or for policy development by a political party. However, total donations are limited to five million rand within a financial year.
Political parties are required to prepare statements detailing all funds and donations received by the represented political party and to submit these statements to an auditor for audit purposes.
Following receipt of the auditor's opinion and audited financial statements, the Commission must prepare a report relating to the funds for each financial year and submit the report, as well as the Commission's books and records relating to the funds, for auditing.
The auditor's report, as well as the Commission's annual report, must be delivered to the parliament by the Commission.
It’s worth noting that the Political Party Funding Act came into effect at a critical time for South Africa, as it prepares for local elections later this year.