Standard Bank to donate R5m to political parties

COPE precluded by bank's formula from receiving any funds before the April 22 elections

JOHANNESBURG - Standard Bank has announced that it will be donating R5 million to political parties during the 2009 election year. The allocation will be done according to the formula and timetable the Independent Electoral Commission uses to distribute government funds to political parties represented in the legislatures. It is in line with a pre-existing policy adopted at board level in 2005. Since the Congress of the People is not yet represented in parliament, they will be excluded from receiving such funding until after the elections on April 22. Standard Bank said in a statement:

"In line with the Standard Bank's policy on the funding of political parties in support of the democratic process, the bank will be donating R5 million during the 2009 election year....The distribution of these funds is based on the Independent Electoral Commission's (IEC) existing funding formula, in terms of which funding is distributed to political parties in proportion to their representation in the National Assembly."

Standard Bank had a policy of not funding political parties up until 2004. However that year the bank was put under considerable pressure to reverse this policy - at a time when the ruling African National Congress was desperate for funds. Standard Bank, along with the Liberty Group, decided to allocate R6,5m to the parties contesting the elections of that year. The allocation was done according to the proportion of seats of each party held in parliament - with half of the donation made before the election and half afterwards. This meant that the African National Congress received around two-thirds of Standard Bank's allocation, and six to seven times more than the next largest political party (the Democratic Alliance).

This formula was one which effectively buttressed the status quo of single-party dominance in South Africa. By contrast, in the same period Anglo Gold adopted a funding policy designed to support political pluralism in the system. Before the 2004 elections it allocated R3,2m to various political parties with 30% going to the ANC and DA and 20% to the Inkatha Freedom Party and United Democratic Movement.

In 2005 the Standard Bank board adopted "a comprehensive policy for South African political party funding. In terms of this policy, a total of R10 million was approved for five years, starting in 2006. The distribution of these funds is based on the [IEC's] existing funding formula." In 2007 the bank allocated R1,7m of this to the different political parties.

One effect of the decision to base allocation according to the IEC formula was that the more seats the ANC gained through parliamentary floor crossing the greater its allocation from Standard Bank. Another unforeseen consequence of this decision is that it precludes the bank from donating to COPE before the April 22 election. The irony here is that the bank's deputy chairman, Saki Macozoma, has recently come out in support of the breakaway. If he had successfully motivated for a more pluralistic approach to donations back in 2004, the bank would have been in a stronger position to allocate some share of funds to COPE before these elections - they seem to need the funding.

Still, COPE should receive at least some of R5m allocated by Standard Bank. In reply to a query from Politicsweb a bank spokesman said that in 2009 the bank will also follow the IEC's schedule for payments. According to the IEC these payments are made at the end of April, July, October and January of each financial year. If this correct - and Standard Bank follows the same schedule - COPE will miss out on the first (and possibly second) allocation, but receive funds thereafter once it has established itself in parliament.

One of COPE's main disadvantages in the run up to the April 22 election is that unlike the other political parties it does not yet receive IEC funding. Over 2008/2009 the IEC allocated R88,3m to political parties represented in parliament (see table). 90% of this total was allocated according to the share of the seats each party holds in the national assembly, and 10% according to an equitable funding formula. This meant that the ANC received 74,6% (or R59,3m) of the 79,5m allocated according to national assembly seats, and R61,1m (or 69,2%) of the total.

IEC allocation to political parties 2008/2009
Party Quarterly pay out Yearly total Percentage
ACDP R 544,356 R 2,177,425 2.5%
AFD R 70,810 R 283,242 0.3%
ANC R 15,278,378 R 61,113,511 69.2%
APC R 223,538 R 894,153 1.0%
AZAPO R 23,946 R 95,786 0.1%
CP R 75,304 R 301,217 0.3%
DA R 2,634,684 R 10,538,737 11.9%
FD R 23,946 R 95,786 0.1%
FF Plus           R 374,085 R 1,496,340 1.7%
ID R 312,391 R 1,249,562 1.4%
IFP R 1,350,771 R 5,403,084 6.1%
MF R 154,480 R 617,921 0.7%
NA  R 23,946 R 95,786 0.1%
NADECO R 226,319 R 905,278 1.0%
PAC R 23,946 R 95,786 0.1%
UCDP R 186,049 R 744,194 0.8%
UIF R 153,947 R 615,787 0.7%
UDM R 402,994 R 1,611,975 1.8%
TOTAL R 22,083,892 R 88,335,570 100.0%

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