AU self-funding plan in trouble despite sweeping budget cuts

Saturday July 7 2018

African leaders pose for a photo during the African Union Summit in Nouakchott, Mauritania

African leaders pose for a photo during the African Union Summit in Nouakchott, Mauritania on July 1, 2018. PHOTO | NMG 

ALLAN OLINGO
By ALLAN OLINGO
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African Union’s plan to self-finance seems to have run into trouble after members failed to agree on the proposal to levy tax on imports to fund the AU Commission’s activities.

This was one of the proposals by current AU chairperson, Rwandan President Paul Kagame, when he took over the reins of the continental body in January.

At last week’s Summit in Nouakchott, Mauritania, attended by only 22 of the 55 heads of state, and government representatives, no substantial progress was reported on the institutional reforms at the Union.

“There was some disagreement among members on President Kagame’s proposal, with countries failing to agree on the application of 0.2 per cent levy on eligible imports in order to fund the Union,” said a source who attended the deliberations both at the ministerial and Summit levels.

An extraordinary summit, whose main focus will be AU reforms, is scheduled for mid-November, before Egyptian President Abdel Fattah al-Sisi assumes the chairmanship early next year.

The summit is expected to address issues to do with separation of powers within the Commission and regional economic blocs as well as the scope of intervention of the AU, especially in the South Sudan conflict.

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The proposed levy on eligible imports is meant to wean the Commission off donors funding.

This proposal, christened the Kigali Declaration, was adopted at the 27th African Union Summit in Kigali in July 2016.

It was made by a review team led by former African Development Bank president Dr Donald Kaberuka.

Implementation of the financing mechanism was supposed to begin immediately, with member states putting in place national legislations, but a majority have concerns about how this would be effected, and have failed to come up with provisions to domesticate it.

None of the countries in East Africa, save for Rwanda, effected this levy in the 2018-19 budget, signalling the lacklustre reception the policy has received.

The Nouakchott summit also approved the 2019 budget of $681.48 million, which is 12 per cent less than the 2018 one, with most of the programmes’ allocation largely expected to come from donors.

Credibility and transparency

For the next fiscal year, the AUC operating budget is $416.32 million, $243.43 million being operational costs for the AU mission in Somalia (Amisom), leaving a balance of $265.15 million.

“I commend the efforts made in the planning of the 2019 budget of the African Union which resulted in a reduction of 12 per cent in the budget compared to 2018. The African Union has applied the ‘golden rules’ and adopted the most credible and transparent budget in our history,” President Kagame said at the Summit.

The Summit also assessed the progress made in the signing and ratification of the African Continental Free Trade Area (AfCFTA) agreement.

It has been signed by 49 of the 55 members. Six states, including Kenya, Rwanda and Ghana have ratified it. The treaty now requires 16 more ratifications in order to come into force.

It would create a bloc with a cumulative GDP of $2.5 trillion, becoming the world’s largest free trade area since the formation of the World Trade Organisation.

Within the region, Burundi has eventually joined, leaving only only Tanzania and Uganda who are yet to ratify it.

The Summit also tackled the migration issue creating an African Observatory for Migration and Development to be based in Rabat, Morocco.

The EastAfrican understands that this move was lobbied and pushed for by Morocco.

The Summit led by the Chairperson of the African Union Commission is also said to have strongly disapproved of the European Union’s recent proposal to create regional disembarkation platforms to be located outside of Europe for migrants recused in international waters.

Last month, the EU said it was looking at a possibility of setting up such centres in North Africa, where most migrant journeys to Europe begin.

Operational centre

“Such platforms should provide for rapid processing to distinguish between economic migrants and those in need of international protection, and reduce the incentive to embark on perilous journeys,” a leaked document from the Council of European Union leaders said.

Last week, the United Nations agencies for migration and refugees said they planned to present the EU with a plan for “regional disembarkation platforms” around the Mediterranean where the bloc could hold migrants and decide whether to admit them, something the African leaders have disapproved of.

The Summit instead tasked the AU Commission to accelerate the establishment of a regional operational centre in Khartoum for sharing of information on human trafficking and smuggling of migrants.

A continental study centre for migration and research data will be set up in Mali. It will provide a platform for sharing data and information among Member States on migration on the continent to allow enhanced governance and management of migration.

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