Question of political financing

A 2011 study by Global Integrity revealed that political finance laws are ‘virtually absent’ in Malawi. What does this mean to the country’s young democracy? Ephraim Nyondo finds out.

In 1999, while president of the United Party (UP), Bingu wa Mutharika wrote managing director of Blantyre-based Safari Clothing Company seeking campaign aid in exchange for government favours should he win the presidency.

Dated April 12, the letter promised the managing director ‘special privileges and treatment in respect of the award of government tenders for supply of goods and services, and uniforms used in government institutions’.

It also pledged ‘guaranteed access to foreign exchange allocation to facilitate your imports of goods for your business and personal use and full adequate security and protection for you and your families and for your business premises as well as your homes’.

As expected, a huge public debate erupted after the letter went public. Interestingly, the scale of the debate even moved the Anti-Corruption Bureau (ACB) to institute a probe in accordance with the Corrupt Practices Act.

Unshaken, Mutharika defended his letter ‘as a normal practice worldwide’.

“People are simply trying to create a storm out of a cup of tea. How can this be corruption? This is a negotiation process. There is nothing wrong in making a promise. There is no crime. I am willing to meet anybody and challenge them on the contents of my letter,” he was quoted in The Nation of April 24 1999.

Mutharika’s story uncovered the issues of questionable income-generating tactics at the heart of political parties in Malawi in their search for survival.

And in political studies, according to Michael Jana, a political scientist, the debate that erupted after Mutharika’s letter falls within what is called political financing.

“This is a complex and controversial area which looks at how political parties get their resources to fund their activities,” he says.

Party funding sources

In Malawi, political parties have two main sources of finances.

One, from the State funds which political parties directly get through subventions or indirectly through things like airtime on State media; and two, from private financing from party membership, interested individuals and organisations, including interested foreign governments.

State of political funding in Malawi

So, what is the state of political funding in the country?

Jana says that the entire political financing framework in the country calls for instant regulation.

Even Catholic University associate professor of political studies Nandini Patel agrees.

“The current framework has a lot of loopholes that ruling parties capitalise on,” she says.

In a Global Integrity study, Malawi scored four on a scale of 100 indicators owing to the country’s lack of political finance regulation for political parties and individual political candidates.

The study said disclosure of party and candidate political finance information to the public is non-existent in the country.

But how factual are these observations? 

Section 40 (2) of the country’s Constitution stipulates that the State shall provide funds so as to ensure that, during life of any Parliament, any political party which has secured more than one-tenth of the national vote in elections to that Parliament has sufficient funds to continue to represent its constituency.

Ideally, in the current set-up, it means Democratic Progressive Party (DPP), United Democratic Front (UDF) and Malawi Congress Party (MCP) are the three on the public payroll.

In separate interviews, spokespersons for the three parties agreed that they get State subventions on a quarterly basis.

Though MCP, through its finance director Makala Ngozo, refused to disclose how much they get, UDF spokesperson Ken Ndanga argued that being public funds, he had no qualms disclosing that UDF gets K1.7 million each quarter.

However, Patel notes that State subventions have several challenges. She argues that the set-up lacks meaningful accountability mechanisms for the public funds allocated to eligible political parties.

“Additionally, we don’t know, for instance, how the taxpayers’ money is spent and whether they are achieving the intended purposes. All we hear are stories of party leaders misappropriating these funds and they are not held accountable,” she says.

Of course, apart from State subventions, political parties in the country also get resources and funding from private sources.

In fact, according to Section 66 of the Parliamentary and Presidential Elections Act, this is legal.

The section advances that “Every political party may, for purposes of financing its campaign, appeal for and receive voluntary contributions from any individual or any organisation or other private organisations in or outside Malawi.”

But Jana notes shortfalls with this framework.

“There have been allegations of ruling parties and their leaders getting funds from private companies and foreign agents in return for lucrative government tenders and corrupt preferential business policies.

“Again, political parties that have been getting funds from individuals within the parties have ended up being personal entities of the benefactors,” he says.

He adds that, being a poor country where State subventions are limited to few parties and even worse, it is inadequate, many political parties in Malawi rely on other sources of funds that often, as it is the case in the country, come with many undesirable strings attached.

Ndanga, Jana and Patel agree that there is an urgent need to regulate political party financing in Malawi.

“Especially when seeking funds from private sources, in UDF, we need tighter regulations that should protect businesspeople who wants to fund a political party that is not government. Most of them fear, and this fear is responsible for clandestine financial dealings which, mostly, are illegal,” says Ndanga.

Patel, however, wants a regulation that should aim at enhancing accountability and transparency of public funds.

“We need to have audited reports of the money government spends on political parties published in the media. Beyond that, we also need to tailor it in a way that ruling parties don’t delay the disbursement of the funds to frustrate the opposition,” she suggests.

With only two legal provisions on political financing, Section 40(2) and Section 66 of the Parliamentary and Presidential Elections Act, Jana argues that they are hugely deficient to address issues surrounding the field of political party financing.

“Political party financing, if left poorly regulated as it is now, will remain an area of unfairness, corruption, patronage and illegitimate policy influences—defeating the whole purpose of political parties in a democracy,” he warns.