Self-financing key issue at AU to make African solutions tangible

JOHANNESBURG: One of South Africa’s most senior foreign policy advisers has identified the issue of African Union (AU) self-financing as a key objective for the host country at this week’s AU Summit.

Deliberations among African foreign ministers are currently under way at the Sandton Convention Centre, and a special session yesterday afternoon examined scales of assessment for African countries, which continues today.

The overarching goal of the AU is to work towards selfreliance in terms of its budget, so that it does not have to rely on donors who often have strings attached to their financial assistance.

AU Commission chairperson Nkosazana Dlamini-Zuma has historically been suspicious of the agendas of foreign donors and would like to see the continental body free itself from donor dependency, as 70 percent of its budget has come from foreign donors.

In the short to medium term, the AU would like to see Africa providing 55 percent of the AU budget and foreign donors 45 percent, which would make African solutions to African problems more tangible.

At the AU Summit in January, the AU made strides in addressing its funding challenges in a practical way, reviewing the capacity of African states to increase their contributions.

It was decided that the AU would cover 100 percent of its operating costs, 75 percent of its programme costs and 25 percent of peace and security costs. The view was that the UN Security Council has the primary responsibility for peace and security and should cover most of the costs, although the AU should also contribute.

The new formula agreed in terms of contributions was that those countries with economies that represent more than 4 percent of Africa’s total GDP would fund 60 percent of the budget. Those countries include South Africa, Nigeria, Algeria, Egypt and Angola.

Libya is also part of this group, but given its instability, its contributions have been temporarily suspended.

South Africa’s contribution to AU coffers will increase, going from $17 million (R212m) to $60m a year – a hefty cost given our own development needs. The AU is hoping to raise a total of $600m a year to fund itself, phased in over five years.

This week’s deliberations will focus on strategies around alternative sources of funding. Previously suggestions were made for countries to introduce fuel, hotel, airfare and even SMS levies. These ideas were met with resistance, given the dependence of some countries on tourism.

A compromise was reached that each country will be free to determine how it will raise the money. This issue remains a significant challenge to the poorest nations on the continent that struggle to meet even the basic needs of their people.

This week’s AU Summit is likely to follow on from the January discussions, take stock of the AU’s current finances, and decide how to meet the goals it outlined at the beginning of the year.