RETURN
The R1-billion election campaign

Last week the African National Congress’s (ANC) head of elections, Nomvula Mokonyane, revealed that the party had, to date, spent in excess of R1-billion on its local government election campaign.

 

The amount seems exorbitant given that other political parties will also be spending additional (albeit lesser) amounts on their campaigns.

Unfortunately none of the large political parties are open about funding sources or what they spend on gaining political office. As a result there was rife speculation as to whether the amount referred was accurate and, if so, whether the costs of election campaigning were not exorbitant.

After Mokonyane’s statement several independent candidates standing as wards candidates indicated they would be spending between R70 000 and R100 000 on their very localised campaigns. If the ANC was to spend a R100 000 (the upper limit suggested) on campaigning in the 4 392 wards their campaign budget would come to about R0.45 -billion. This is less than half the amount indicated by Mokonyane. Perhaps the ANC has had more intensive campaigning and has not been able to leverage significant economies of scale associated with large campaigns.

 

If the R1-billion figure is accepted the question arises as to whether this is a worthwhile investment for the party. There are direct financial benefits of holding council positions in the form of the salary paid to the elected councillors. Over and above this there are other benefits in terms of influence, allocation of budgets, awarding of contracts etc. Putting the latter aside we can see what the direct financial returns of the campaign are.

 

Each year South Africa spends approximately R3-billion a year on salaries for councillors. Should the ANC get only half of all the council positions available the financial benefit to ANC councillors is R1.5-billion each year for a period of five years. The R1-billion investment nets a R7.5-billion return. The campaign costs are certainly rewarding for those who win municipal office. However these salaries are paid to the councillor and not the party. The question arises as to why the party invests in getting the candidates elected? Do the benefits arise solely from the influence members exert within municipalities?

 

This does not appear to be the case. Councillors elected on party tickets routinely pay a proportion of their salaries to their party. Although the proportion is not published it is reputed to be as much as 20% of their councillors’ salaries. If ANC councillors pay 20% of their salaries over the five year term the partys’ R1-billion investment is recovered if it wins more than one-third of the available seats. The ANC is likely to get closer to two-thirds of the available seats effectively doubling the return on its R1-billion investment in the election.

 

While the remuneration of holding political office is attractive the benefits lie less in the salaries paid than in the influence associated setting policy, awarding contracts, influencing who fills municipal posts etc. This influence has benefits (financial and other) over-and-above that gained by taking a cut of councillors earnings. For the ANC the  financial benefit of  20% of councillors salaries yields a handsome return on paying for  a R1-billion election campaign.

RETURN
 

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