The methods of party financing used in Africa are primarily individual donations (membership fees and fundraising); private sector donations (corporate contributions); public funding (cash subsidies, in-kind or indirect assistance); and foreign donations (foreign governments, diaspora communities).
There are advantages and disadvantages to each. In general, it is considered that a combination of both private and public funding is beneficial. It is recommended that private funding also be regulated, with requirements for disclosure and potentially a cap on the amount. Some of the literature suggests the use of a general private fund to reduce the influence of special interests; private donations would be pooled together and distributed to all eligible parties. However, there may be little incentive for private donors to contribute to such a fund. Regarding public funding, some form of equitable allocation is desirable, as opposed to a purely proportional system that rewards parties for their current strength and representation in Parliament. In addition, in-kind assistance (e.g. free public radio and television time) and indirect assistance (e.g. tax benefits for individual donations) should be considered, in order to reduce the risk of corruption with cash subsidies. Indirect assistance in the form of tax benefits can also be beneficial in encouraging grassroots involvement. Another way to encourage parties to reach out to the grassroots is the use of matching funds, whereby the state agrees to match all private donations. The literature also recommends that more attention be paid to monitoring and enforcing existing and new regulations through special enforcement/ auditing agencies, the media and various civil society groups.
