Challenges of Regulating Private Funding of Political Parties in Africa
Prof Yaw Saffu
--- Paper Prepared for the ISS Seminar: Where Money Meets Politics: Exploring Policy Options to Regulate the Influence of Private Funders on South African politics, 31 October - 1 November 2002, Leriba Lodge, Centurion, South Africa
The paper assumes that the powerful case for regulating private plutocratic, corporate and foreign funding of political parties would be more than amply made elsewhere at the Conference. It, therefore, skips all introductory preliminaries in that regard and goes straight to the challenges of establishing, monitoring and enforcing a workable and satisfactory regulatory regime for private funding of political parties in Africa .
Disclosure Laws
The first observation to make is that disclosure laws are absolutely the fundamental pre-requisite for any hope of instituting an effective regulatory regime for the private funding of political parties, in Africa or anywhere else. Although the monitoring and enforcement of disclosure laws present their own challenges other regulations concerning the raising and expenditure of funds by political parties are virtually worthless if there are no disclosure provisions.
However, the challenges presented by disclosure laws evidently contribute to their relative absence in Africa . Reforms of any sort require the approval of and enthusiastic support of ruling parties. But ruling parties are generally lukewarm at best when it comes to reforms that might be seen as diluting the advantages of incumbency. The first challenge, therefore, is selling to ruling parties the virtues of regulating private funding and the necessity for disclosure laws.
In Africa, countries without disclosure laws outnumber those with by five to one. For example, in the Southern African Development Community (SADC) region the majority of member states (Lesotho, Mauritius, Malawi, Seychelles, South Africa, Tanzania, Zambia and Zimbabwe) do not have disclosure provisions for privately raised political party and campaign funds. The only exception is Namibia, which also does not require full disclosure but disclosure of foreign donations.
Nigeria, Kenya and Senegal, three of Africa 's premier league countries, also have no disclosure laws. In West Africa only Benin, Ghana and Guinea have disclosure laws. Benin and Guinea require that the donor, nature and value of grants and donations be declared to the Ministry of Interior. Without a Freedom of Information Act to equalize access to whatever is disclosed, the law thus, unwittingly, gives to the Minister, who is a partisan politician, potential political hand grenade against opposition parties. As far as one can see, there is no indication of when the declaration must be made.
In Ghana, on the other hand, the Political Parties Act, 2000 specifies that within six months from 31 December of each year, a political party shall furnish the Independent Electoral Commission, in a specified form, "the state of its accounts; the sources of its funds; membership dues paid; contributions or donations in cash or in kind; the properties of the party and the time of acquisition; and such other particulars as the Commission may reasonably require". Audited accounts of the party for the year must be filed with the Commission at the same time. Further, the Commission can order the accounts of a political party to be audited at any time by an auditor appointed and paid for by the Commission. It can also request a political party to furnish it with any information or records that may be reasonably required to enable the Commission to ensure that the provisions of the Act are complied with.
Rules on Sources of Private Funding of Parties and Election Campaigns
On the revenue side, regulatory regimes usually attempt to indicate which sources of private funding are permitted and which are prohibited, and then might go on to impose some limits even on the acceptable sources. The permitted sources are usually the traditional sources of party financing. The Political Party Laws that choose to specify the permitted private sources, such as those of Benin, Guinea, Senegal and Cameroon, list the following: members' contributions (in the form of joining fees and annual dues); donations and grants or gifts from members and sympathizers; income from party fund-raising activities. Ghana 's Political Parties Act does not list but imply these traditional sources: "Only a citizen may contribute in cash or in kind to the funds of a political party". Citizen includes a Ghanaian owned firm, partnership or enterprise or a company that is registered in Ghana and is at least seventy-five per cent Ghanaian owned.
The Ghana Act, in that short statement on who is permitted to contribute to the funding of political parties, introduces two items that constantly crop up in the debates on private funding of political parties in Africa and elsewhere: foreign contributions and corporate funding, which shall be addressed below. The Ghana Act removed a curious anomaly from an earlier 1992 Political Parties Law it replaced: limits on subscriptions and dues that members paid. Despite the fact that party membership subscriptions are acknowledged as ideally the preferred method of funding parties, and democrats wish that these accounted for far more than just the tiny proportion they currently contribute to the incomes of political parties, the 1992 Law placed limits on them. Curiously, there were no such limits on donations and one off contributions by members and sympathizers. It is as if someone was afraid of the emergence of mass parties.
Plutocratic donations, from members, sympathizers and lobbyists, are now the main source of party funds all over Africa . But it is clear from all sorts of attempts to limit contributions from such sources, that some states are uncomfortable with that fact. For instance, in Guinea, Article 24 of the Political Parties Charters limits the contributions that non-members can make to political parties: "The Total amount of donations and grants from Guinean nationals should not exceed 20 per cent of the party's total resources made up of members' contributions, revenue from party activities and state assistance"(1). In Benin , not more than one half of that, or 20 per cent, can come from foreigners.
Many parties in Africa impose a compulsory levy, usually a percentage of salary, on party functionaries and occupants of certain positions of state, such as members of parliament and ambassadors. Another source of private funding for political parties, which several legislations on the continent specifically mention as permitted, is fund raising activities, from fund raising dinners and dances and auctions to running companies and owning properties for letting. Regulating such events and activities can be left to the usual regulators, such as municipal authorities or the Registrar of Companies and the Inland Revenue, if political parties are not exempted from paying taxes. Regulating private funding of political parties, therefore, becomes virtually synonymous with regulating plutocratic donations, bar generally secondary concerns with foreigners and corporate entities.
Foreign funding of political parties is prohibited in several countries in Africa. Cameroon, Guinea , Mali and Senegal prohibit donations and grants of any sort from foreign groups and individuals. Ghana used to belong to that group. But under the 2000 Act that replaced the 1992 Law on Political Parties, foreign funding is now allowed. However, only governments and international NGO's not foreign individuals or corporations, are allowed to contribute to party funds, and they may do so only indirectly through the National Electoral Commission, and generally to all parties, not to a specified party or parties.
Benin allows foreign contributions, but stipulates that funds from foreign sources must not exceed 20 per cent of the total income of the party. Others, such as the Ivory Coast, Mozambique Congo-Brazzaville and Zimbabwe allow foreign contributions. Diversity of approach to the issue is very much in evidence on the continent. But it seems the majority position is to be pragmatic and silent and have no legislation. In practice, this amounts to allowing foreign contributions.
Corporate donations also raise understandable concerns for regulators. The 1992 Political Laws in Ghana prohibited corporate funding of political parties altogether. Unduly restrictive as the Ghana Law was, Morocco exceeded even that, prohibited all campaign fund raising by political parties. But whereas Morocco funds political parties with state subsidies for their election campaigns, Ghana did not under the 1992 Law, nor does it do so under the current Act. The 2000 Political Parties Act allows corporate funding of political parties. But the company must be registered in Ghana and must be at least 75 per cent Ghanaian owned.
If there are disclosure laws, foreign and corporate donations should be far easier to regulate and police than domestic plutocratic donations, if only because of the numbers likely to be involved, and because of the extra requirements of international money transfers and corporate governance. Plutocratic donations, as opposed to grassroots donations, predominate as the chief sources of private party and campaign funds in Africa as elsewhere. But in Africa such donations are hardly regulated, although the literature on the amounts involved in countries such as Nigeria, the Ivory Coast, Cameroon, Senegal, Kenya, suggests that they should be. I cannot think of one example of limits on individual donations, or the purposes for which monies can or cannot be given.
Footnotes
1. Konde, Ibrahima, "Political Parties and Democracy - Legislation on Funding and Regulations to Ensure the Success of Multi-Party Democracies: The Case of Guinea ", in Kumado, Kofi (ed.) Funding Political Parties in West Africa . Accra : Friedrich Ebert Foundation, 1996, p.128.
