ANC is technically insolvent, financial report shows
The organisation is also R215m in debt and had a deficit of R47m over the past financial year
The ANC is technically insolvent as its liabilities exceed the value of its assets, according to the financial report tabled by outgoing treasurer-general Zweli Mkhize to the ANC national conference on Sunday.
Mkhize says in his report that "a process of updating the valuation of our assets will soon need to be undertaken to ensure that the situation is regularised".
The organisation is also R215m in debt and had a deficit of R47m over the past financial year. This was despite a debt-management programme over the past five years that brought debt down from the 2013 level of R249m.
But two election campaigns over the period and several conferences saw debt balloon again by 2017.
The ANC’s election campaigns have been an enormous drain on its finances.
The party spent R750m on the national and municipal election campaigns, both held in the past five years.
A feature of campaign rallies has become the distribution of free T-shirts that together with other promotional material cost R250m. The financial report was first reported on by City Press at the weekend.
The R47m deficit for 2017 came despite a record five years of fund raising in which the ANC collected R2.6bn in revenue, mainly from private donations. Fund-raising income amounted to R1.69bn.
The ANC, like all political parties in SA, does not disclose the identities of its funders.
However, R443m came from the Independent Electoral Commission, which funds political parties on the basis of their size, and R80m came from the Progressive Business Forum — which hosts corporate dinners at which business people can interact with ANC leaders.
Debt management had helped to bring legal costs down over the five-year period, says the report, although these rose again to R11.2m in 2017 due to new litigation.
Over the five-year period, the ANC faced more than R80m in legal claims from creditors, which it settled for R62m.
Some of these cases dated back to the unpaid bills for the 2007 ANC national conference, the ANC Youth League Conference in 2008 and the national election in 2009.
In the report, Mkhize suggests that the ANC needs to modernise and restructure itself in order to live within its means.
One possible solution under discussion, which was reported by the Sunday Times last week, was that the ANC’s investment arm, Chancellor House, sell its assets and place the funds in an endowment.
The main remaining asset of Chancellor House is United Manganese of Kalahari — which is jointly owned with Russian company Renova.
This is a large manganese mine in the Northern Cape with an estimated value of about R10bn.
It is unclear, though, how much Chancellor House still holds as it is believed to have diluted its stake over the years.