The Political Funding Act, implemented in 2021, aimed to increase transparency in political party funding. However, the Act has fallen short in providing a clear picture of who donates to political parties. According to Ramakwe Pule, senior project coordinator at My Vote Counts, the Independent Electoral Commission's Quarterly Declarations Report, which lists donors, often raises more questions than answers. For instance, the report lists We Are The People as a donor to Rise Mzansi, but it is unclear who is behind this entity.
A recent example of this transparency issue is the donation of R2.5-million to the Democratic Alliance by Kerry Road Trust in the first quarter of the 2026/27 financial year. An investigation into the trust reveals that it is listed in the Australian Business Register as The Trustee for CPIF 138 Kerry Road Trust, an active fixed unit trust based in New South Wales, Australia. This raises questions about how this foreign entity's donation complies with South Africa's Political Funding Act, particularly regarding restrictions on donations from foreign entities.
The Constitutional Court of South Africa recognized the importance of transparency in political party funding in its 2018 landmark ruling in My Vote Counts (MVC) Non-Profit Company (NPC) v Minister of Justice and Correctional Services. The court held that information about private funding of political parties is essential for citizens to make informed political choices. This ruling led to the enactment of the Political Funding Act, which established a more transparent and accountable framework for public and private political party funding.
Despite the Act's intentions, a fundamental question remains: do we really know who funds South Africa's political parties? The Act requires political parties to disclose information about private donors making donations exceeding R200,000 to the Independent Electoral Commission, which then makes these disclosures available on its website. However, this disclosure does not necessarily reveal the identities of the natural persons who ultimately control or own the legal entities making donations.
The difficulty in identifying the true donors is particularly apparent when trusts, investment firms, and private corporations are disclosed in the IEC's report. Voters may learn the name of the legal entity through which a donation was made without learning who is behind the donation. This problem allows legal entities to be used as conduits or proxies for political donations, while the identities of the individuals behind these entities remain undisclosed.
To address this issue, My Vote Counts suggests that mandatory, proactive disclosure of beneficial ownership information is necessary. This would enable voters to track actual political influence ahead of elections. The organization concedes that while many donors can be identified through their public profiles, others remain difficult to identify without this information. The examples of We Are The People and Kerry Road Trust illustrate this difficulty.
The lack of transparency in political party funding can lead to strategic circumvention of the Act's disclosure threshold or upper limit. Donors may make donations in their personal capacity and through one or more entities in which they enjoy the benefits of ownership and control, without voters being able to identify that the donations originate from the same ultimate source. The donations made by Fynbos Ekwiteit (Pty) Ltd and Fynbos Kapitaal (Pty) Ltd to the DA demonstrate this issue, with the two entities connected to Capitec Bank founder Michiel le Roux donating a combined R55-million to the DA in the first quarter of the 2026/27 financial year.
Key points
- The Political Funding Act has failed to provide full transparency on political party donations.
- Mandatory disclosure of beneficial ownership information is necessary to track actual political influence.
- The lack of transparency can lead to strategic circumvention of the Act's disclosure threshold or upper limit.
