South Africa: Where Has All the Money Gone

South Africa

The African National congress (ANC) ruling party of South Africa, has financial woes as all the money is gone. The possibility of retrenching staff members is highlighted and can be a reality in the near future. Staff has not received salaries for two months as the party suffers from money problems.

The Secretary General Gwede Mantashe admitted this week that there were problems and the ANC party was in dire need of money to meet all obligations. One of the reasons cited for the decrease in cash, flow was the loss of 16 parliamentary seats in the past May 2014 general elections.

Angry staff working for the ruling party demanded salary increases and Mantashe stated that there was no money for increases or bonuses but the party would consider options when matters improved. Mantashe told staff members to be patient during this terrible time.

Raising funds from private investors had declined, and the ANC party has been threatened with liquidation from angry suppliers. Millions of rands that are owed for services rendered to the ruling party, remain unpaid to service providers.

The revelation of the ANC financial woes came from members who preferred to remain anonymous. During a heated meeting at Luthuli House, Mantashe said the staff members about the financial woes. The staff members were told that if they were not happy with the situation they were welcome to go and find alternative work. Staff members are demoralized and insisted that no increases or bonuses were paid over the past three years. The news of wanting to retrench staff members was received with hostility. Mantashe denied reports that the ANC were planning staff retrenchments.

A senior official said that most private companies, including Black Economic Empowerment (BEE) companies within South Africa, were hostile toward the ANC, and Mantashe dismissed this remark. On the contrary, Mantashe said there were more donors now, and people with old political problems were returning to the ANC fold.

The rising debt of the ANC is not taken lightly as suppliers are now turning to the courts in an attempt to recover monies owed. It is estimated that the ANC have unsettled debts amounting to ZAR29 million to one supplier and another ZAR10million to another. The total liabilities have not been disclosed. During 2012, another private company took the ANC to court after exhausting attempts to recover unsettled debt. It is believed there was an out of court settlement between the company and the ANC party.

Immediately after the reports circulated through the media about the financial woes of the ANC party, a press release was issued rubbishing the claims of bankruptcy. The ANC claim that the financial situation has improved within the organization. The ANC party claims all financial obligations have been met. The ANC refute all allegations circulating about the financial situation. The ANC party denies claims that there was staff retrenchments planned and stated that salaries were paid monthly.

The sudden awareness of the financial situation of the ANC ruling party of South Africa followed the mini-budget speech in parliament last week. In the budget speech, concern was raised of the slow GDP growth and the need to raise additional funds to finance the future budget. A hint of raising taxes is on the cards for the people of South Africa. Where has the money gone is a mystery and South Africa is expected to see a rapid decline of service deliveries or growth. Accountability is not a strong feature for most provinces of South Africa. The corruption within state departments has escalated over the past twenty years. South Africa has no more money it is all gone.

Opinion by Laura Oneale

Sources
Mail & Guardian
BusinessTech
City Press

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