A 0.2% levy on eligible imports to African countries will enable AU states take charge of funding the organization
Nairobi – African Union member states have begun implementing measures aimed at increasing funding for the organization and reducing its reliance on donor aid.
One of the key measures being undertaken by member states to ensure reliable funding for continental development and integration programmes is the introduction of a new levy on eligible imports.
The announcement was made during the 2016 Annual Workshop for African Union Liaison Offices’ Finance Officers and Heads of Mission held in the Kenyan capital, Nairobi last week.
Speaking at the function, Anthony Okara, the Deputy Chief of Staff at the African Union Commission, said the 0.2% levy on eligible imports to African countries will enable member states take charge of funding the organization.
“The heads of state in January, this year, decided that this system of funding is not sustainable, they organized a retreat in Kigali and it was decided that we shall introduce a new levy of 0.2 percent on all eligible goods which will go a long way in creating our independence and sustainability. We have since begun implementing it,” Okara said at the meeting attended by the Special Representative of the African Union Commission Chairperson (SRCC) for Somalia Francisco Madeira among other dignitaries.
African Union, he added, has also begun engaging regional blocs and finance ministers of member states to help speed up the implementation of the levy.
Currently, only 40 percent of the African Union’s budget is funded by member states, with the balance coming from donors. It has made it difficult for the organization to finance critical internal and external activities, due to the unsustainability and unreliability of foreign funding. However, once fully implemented, the levy will enable member states to fully fund the functioning of the African Union Commission and cover at least 75 percent of programmes.
Okara observed that the heads of state also tasked Rwandan President, Paul Kagame, to spearhead reforms aimed at improving the functioning of the organization.
“They (heads of state) detailed President Kagame to form a team to undertake a comprehensive reform of the AU. President Kagame has looked for eminent leaders around the continent and constituted a team of 12 which is working very hard on the reforms,” Okara explained.
The official noted that the AU has implemented a number of financial reforms, among them, Automated Standard Application for Payments (ASAP) and the Quick Book System, to improve accounting and reporting.
The two-day meeting also discussed ways of improving the financial management of African Union Liaison Offices and peace support operations.
Last September, at a meeting in Addis Ababa, finance ministers agreed on the need to speed up the implementation of the AU import levy to provide reliable and predictable funding for the operational, programme and peace support operations budget of the organization.
The ministers also urged the African Union Commission to continue its financial management and accounting reforms to help enhance transparency and accountability.