For years "who provides the funding for African Union budgets" has been a never ending questioning.
When a group of 55 people, with 5 employed with fair wages, about 15 in informal hand-to-mouth jobs and the remainder unemployed form a union body, the outcome will often be one of these:
They will depend on the contribution of the 5 which will never be enough for anything meaningful.
They will be dependent on friends, family etc in essence external funding.
They can levy each other at the smallest opportunity to generate money
To put the above in context, that is the situation of the African Union, a body previously formed as organization of the African Union(OAU) by Osagyefo Dr. Kwame Nkrumah, Gamal Abdel Nasser and other prominent African leaders. The aim of the union was anything but a toothless body wholly dependant on foreign help.
According to the Institute for Security Studies , the total approved budget for 2021 was $623,836,163, of which $203,500,000 (32%) was to be financed by member-state contributions, and $406,194,344 (65%) by external partners. A total of $605,756,610 has been approved for the 2024 AU budget, of which $370,080,331 (62%) is to be financed by external donors, and $200,000,000 (33%) is to be financed by member states .
Until 2017, repeated efforts at reducing dependency on foreign funding and increasing the yearly contributions from the member states of the AU had largely failed. Unpredictability and unreliability of funding by both African member states and by external funders led to wider management and staffing challenges. Due to a financial crisis of the AU around 2016, a renewed and joint push at different levels of the AU resulted in hands-on institutional reforms, piloted by Rwanda’s charismatic President Paul Kagame.
Financing from AU member states
Contributions from African member states to the AU budget constitute one source of AU funding. These planned contributions are calculated on the basis of three-yearly assessments and are meant to be paid upfront, at the start of each budget year (1 January - 31 December).
The criteria for such country assessments, related to a country’s share of the continental GDP, aim to combine the principles of fairness and solidarity. There are three categories or tiers of countries:
In 2005, AU member states decided that the:
Tier 1 countries(GDP above 4%) of the five bigger economies (Algeria, Egypt, Libya, Nigeria and South Africa) should contribute 48% (9.6% each) of total assessed contributions.
Tier 2 countries (GDP 4%-1%) (Angola, Kenya, Ethiopia, Sudan, Libya, Côte d'Ivoire, Ghana, Tunisia, Tanzania, Democratic Republic of Congo, Cameroon, Zambia, Uganda) should contribute 37 % of total assessed contributions.
Tier 3 (GDP under 1%) (Gabon, Chad, Equatorial Guinea, Mozambique, Botswana, Senegal, South Sudan, Republic of Congo, Zimbabwe, Namibia, Burkina Faso, Mauritius, Mali, Madagascar, Benin, Rwanda, Niger, Guinea, Sierra Leone, Togo, Mauritania, Malawi, Eswatini, Eritrea, Burundi, Lesotho, Liberia, Cabo Verde, Central African Republic, Djibouti, Seychelles, Somalia, Guinea-Bissau, Gambia, Sahrawi Arab Democratic Republic, Comoros, São Tomé and Principe.) should contribute 15% of total assessed contributions.
It is time to look for a different mechanism that formally and legally binds us to act without delay and holds us accountable for outcomes. The diagnosis was clear: “the level of dependence on external funds19 raises a fundamental question: How can member states own the African Union if they do not set its agenda?”. And the recommendations were sufficiently concrete for action. In January 2017 the AU Assembly approved these recommendations in four mutually reinforcing action areas: the AU had to prioritise actions with a continental scope, realign its institutions to deliver against those priorities, manage the AU efficiently at political and operational level, and work towards the sustainable and accountable financing by member states of the AU.
A start was made with implementing the 0.2% import levy. The initial opposition to this continental policy has waned, and by November 2018, 24 member states were at various stages of implementing the Kigali financing decision: 14 member states are collecting the 0.2% levy, 4 are implementing the financing decision with modalities and 6 are in the process of starting implementation.
According to the African Union, the levy is applicable and is to be instituted to finance 100% Operational Budget, 75% Program Budget and 25% Budget of the Peace Support Operations of the African Union as well as any other expenditure of the Union that may be determined by the Assembly.
Barring all other challenges, if the levies are collected properly and remitted to the African Union, 100% of the operational cost of the African union can be covered.
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