Pan African Visions

African Union to Use Imports Cash to Get $1.2 Billion Funds

July 18, 2016

By Saul Butera*

Mechanism to see 0.2% of eligible imports go toward funding
New funding plan will start in 2017, Rwandan minister says
The African Union agreed to use some cash paid to import goods to help raise $1.2 billion starting next year, reducing its reliance on donors such as the World Bank that provide about three-quarters of funding for its programs.
[caption id="attachment_31262" align="alignleft" width="300"] Heads of state and government pose during a photo call before the official opening of the 27th African Union (AU) Summit in Kigali on July 17, 2016.[/caption] The AU’s heads of state on July 16 decided that 0.2 percent of a country’s eligible imports will go toward funding the AU Commission’s programs, Rwandan Finance Minister Claver Gatete told reporters in the country’s capital, Kigali, where the AU Summit is taking place. Eligible imports exclude products such as medicines, fertilizers and baby food, he said. The money will be collected by local revenue authorities and held in central bank accounts, from which the cash will be automatically disbursed. The 54 member states last year resolved to find a way to fund three-quarters of its programs and 25 percent of its peace-support missions itself. Donor include the European Commission, World Bank, developed countries and other partners. The commission’s budget this year is $447 million, Gatete said.
“We should not be a burden to the donor communities, we should be able to finance our own activities, and this is the beginning,” Gatete said. States will be punished for violating their obligations, he said, without providing more information.
The AU supports programs aimed at developing transport, energy, water and telecommunication services in the continent, among others.
*Bloomberg