ANC in serious financial trouble

The African National Congress (ANC) is once again under scrutiny for its controversial multi-million-rand debt settlement with Ezulweni Investments, a debt that the ANC is struggling to repay.

The case stems from Ezulweni Investments’ application for the ANC to pay R102.5 million, plus interest and costs, for supplying and installing campaign banners during the 2019 election.

The ANC denied that any contract existed, arguing that the alleged signatories lacked the necessary authority and that the factual disputes remained unresolved.

In late 2023, the Supreme Court of Appeal rejected these claims, finding no bona fide factual disputes and confirming that one official had authority to conclude election-related contracts.

A month later, on 21 December 2023, the ANC and Ezulweni signed a settlement agreement. In it, the ANC placed an order valued at R190 million to write off the historic debt.

This was effectively a contract for 2024 election materials, including 15,000 banners and 1 million corex boards earmarked for what the ANC calls “strategic partners” and “strategic alliances.”

ActionSA, a key litigant in unmasking these agreements, accuses the ANC of breaching the provisions of the Party Funding Act by disguising a donation as a commercial transaction.

The party’s national chairperson, Michael Beaumont, said that the ANC’s R102.5 million (~R150 million in 2025, with interest and inflation) debt to Ezulweni from 2019 was effectively written off through an inflated order.

He said that independent suppliers estimated the cost of the order at R125 million.

“This means the ANC settled a R150 million debt with only R65 million in actual value. In terms of the law, that is a donation-in-kind of about R85 million, well above the R15 million annual limit for any single donor.”

The debt arrangement was concluded before changes to the Political Party Funding Act, which raised the disclosure threshold to R200,000 and doubled the annual donation cap from R15 million to R30 million per donor.

Parties call for an investigation

ActionSA contends that the agreement effectively constituted an unlawful political donation and has urged the IEC to reopen its investigation.

These calls have been echoed by ANC GNU coalition partner, the Democratic Alliance (DA).

The DA’s Willie Aucamp said that the party is particularly concerned about 15,000 banners and 1 million corex boards earmarked for what the ANC calls “strategic partners” and “strategic alliances.”

“These documents raise serious questions about which political parties are benefiting from ANC funding,” said Aucamp.

“South Africans have the right to know if these parties are effectively acting as ANC proxies during and after elections.”

He said that the DA will submit a PAIA request to the ANC to identify all parties that received support under the Ezulweni contract and urge the IEC to investigate.

The DA called for clarity on whether providing materials to “strategic partners” constitutes undeclared funding and stressed that all in-kind donations should be transparent to voters.

The IEC has long stated that its powers to investigate are hamstrung by legislation, which stipulates that prime face evidence must be presented for an investigation to occur.

Beaumont told Newsday that “the lack of urgency of the IEC speaks to both the lack of will of the IEC and the lack of teeth afforded to them by the legislation.”

“The IEC could not have done less to look into this matter and seems to require a complainant to make a case of breach of the Act, despite it being the  only body with the powers to investigate and demand submissions from parties.”

He said that, now that the party has given them the debt settlement agreement, “they never bothered to ask for, they will have no choice but to act because the agreement is patently and objectively unlawful.”

The IEC told Newsday that the matter is currently the subject of a court case brought by ActionSA against the Electoral Commission. “The IEC is not at liberty to engage on the subject as the matter is sub judice.”

Ezulweni gunning for the ANC

Ezulweni is still owed tens of millions from the ANC. With at least three bank accounts attached and payments stopped to settle an R85-million debt, the ANC also faces an insolvency application

Rapport first revealed that the ANC’s bank accounts were frozen and goods worth R140,000 were seized from its Luthuli House headquarters last week. This is far short of the party’s debt to Ezulweni Investments.

The Daily Maverick reported that the Sheriff of the Court has also attached at least three bank accounts, though their combined balance is unlikely to cover the R85 million owed after years of legal wrangling.

If the debt remains unpaid, Ezulweni’s lawyer, Shafique Sarlie, told the Daily Maverick he may proceed with an unprecedented insolvency application, while also exploring the attachment of provincial office assets and accounts.

The ANC plans to raise novation as a defence, arguing that a settlement agreement requires restarting recovery proceedings.

The ANC previously lost a debt attachment case in the Supreme Court of Appeal, and the Constitutional Court dismissed an application for lack of compelling grounds.

Third parties have approached Ezulweni to buy the debt, creating political risk if adversaries acquire it. Despite this, Ezulweni owner Renash Ramdas continued working for the ANC, citing patriotism.

In response, the ANC said it “will not be distracted by attempts to sensationalise this matter and by leaking confidential information to the media.”

“We remain committed to transparency and accountability and will act firmly, within the bounds of the law, to protect the integrity of the movement.”

ANC’s funding secrecy

The ANC emerged as by far the biggest beneficiary of political funding in 2023/24, pulling in more than R1.7 billion in total income.

But civil society watchdog My Vote Counts (MVC) warns that most of the ruling party’s private income remains a mystery.

The ANC’s funding, which dwarfed all other political parties, was split between public and private sources:

• Public funding: R1.19 billion (from the IEC, Parliament, and provincial legislatures)
• Private funding: R527 million, of which only R69 million was disclosed donations and a staggering R413 million (78%) was recorded as “other income” outside the Party Funding Act’s ambit.

The scale of this income means the ANC alone accounted for over 53% of all party funding in South Africa during the reporting year, which amounted to R3.23 billion.

However, of the private funding, only 31.8% of this was disclosed; the rest fell into unregulated categories such as donations under the threshold, membership fees, or “other income.”

We do not know where 78% of the ANC’s private funding came from