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The African Union’s self-financing agenda: 3 ideational measures that should guide it

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The African Union’s self-financing agenda: 3 ideational measures that should guide it

Babatunde Fagbayibo

02 Apr 2019

5min min read
  • Finance

ince 2016, there have been efforts to implement programmes aimed at weaning the African Union (AU) off excessive reliance on foreign donors. The dependency on external donations continues to expose the AU to manipulation, and further undercuts its legitimacy to effectively drive the regional integration process.

For example, the European Union (EU) has on occasions been accused of using its financial support to undermine the AU’s authority by channelling funds to ad-hoc or sub-regional security arrangements rather than a continental programme. Similarly, the EU has also used its funding clout to engage in ‘divide-and-rule’ tactics by encouraging African countries to negotiate its Economic Partnership Agreements (EPAs) – which are agreements between the EU and African, Caribbean and Pacific countries and regions, aimed at encouraging free trade and the opening of markets for trades and investment – with sub-regional groupings or individual countries, rather than a continental collective. The AU has, however, adopted a common position to negotiate EPAs, from 2020, as a continental unit.

At the Kigali Summit of the AU in July 2016, a decision was made by African leaders to implement a 0.2% levy on eligible imports into member states to finance the AU. So far, about 14 countries are collecting the 0.2% import levy, four member states are implementing the decision with some variations, and six are about to start implementing the decision. In addition to this, the AU has also reduced its budget for 2019 by 12%, compared to that of 2018, again in line with moves to decrease external dependency. In turn, this move has increased member states’ contribution to the annual budget to 46% with the remaining 54% expected to be covered by development partners. This reduction is in line with the AU’s decision to adopt the nine golden rules on financial management, which highlight the importance of accountability and prudent management of financial resources.

Ideational measures 

While these efforts are commendable, it remains unclear how this will become a sustainable endeavour as AU member states are known for flouting organisational rules and procedures. The Rwandan president, Paul Kagame, described this as the “crisis of implementation”. The institutions responsible for providing guidelines and ensuring compliance are either too weak or non-existent. For example, organs such as the AU Commission and the Pan-African Parliament (PAP) lack meaningful powers, with the Court of Justice chamber of the Merged African Court of Justice and Human Rights (ACJ&HR) still yet to become operational.

"These three measures speak to ensuring the buy-in of the broader civil society, business and other critical non-governmental stakeholders, encouraging innovative and flexible means of raising funds, and the judicious use, and transparent reporting, of AU funds."

Therefore, in order to guarantee a sustainable self-financing programme, the AU has to move away from an elitist top-down approach to anchoring its agenda towards implementing concrete ideational measures. In this respect, I am suggesting three ideational measures that can help in addressing this: awareness, flexibility and accountability. These three measures speak to ensuring the buy-in of the broader civil society, business and other critical non-governmental stakeholders, encouraging innovative and flexible means of raising funds, and the judicious use, and transparent reporting, of AU funds.

These measures have become necessary due to the continued failure of the top-down approach of the AU to gain the trust of African citizens in the management of regional integration issues, as well as in ensuring that member states make genuine commitments to empowering regional institutions and provide specific and practical steps on the links between pan-Africanism and self-reliance.

The current top-down approach only allows for top politicians, senior AU officials and strategically selected and well-connected civil society organisations (CSOs) to design and implement decisions on regional integration. This explains why many African citizens cannot relate to AU policies and programmes.

Awareness:  Involving the masses

Like many other AU initiatives, the debate and decisions around self-financing have been restricted to elitist circles (such as politicians, academics, AU senior officials and organised CSOs), with little or no input from African citizens. In this regard, the AU has missed the opportunity to build on the participatory structures that led to its Agenda 2063 or the African Peer Review Mechanism Process (APRM) to involve the masses in the debates and discussions around self-financing.

This exclusion of this critical group is responsible for the absence of enthusiasm, and the possibility of getting broad-based, nuanced suggestions on ways of raising funds for regional integration. Meetings with organised civil society through the equally elitist AU Economic, Social and Cultural Council (ECOSOCC) is not sufficient. The AU has to invest in genuine grassroots mobilisation and engagements that bring as many people as possible to the negotiation table. For example, the AU should encourage the involvement of traditional authorities, youth and women movements, and labour unions as discussion and implementation units for raising funds.

These debates should be as frank as possible, allowing citizens to discuss the benefits and costs of self-financing, in particular how this translates to their socio-economic wellbeing and development. It is through these engagements that important measures such as crowdfunding, agreement on salary deductions, commitment from informal traders to raising funds, and other innovative ways through which citizens can participate in the AU process, can be achieved.

Flexibility: Innovative ways of raising funds

Another way of ensuring commitment of member states to raising funds for the AU is the adoption of a flexible approach. This approach allows member states to adopt innovative fund-raising strategies that suit their different national contexts.

For example, countries such as South Africa and Egypt have already indicated their intention to raise the 0.2% tax via means other than import levy. As long as the amount remitted corresponds with the 0.2% import levy, the AU should be less concerned about how the funds are raised. Member states who wish to remit more than the minimum amount should also be encouraged, and such countries could then be incentivised through rebates or targeted infrastructure funding or other financial support.

Member states should also be encouraged to come together to push uniform ideas and platforms for raising funds. For example, the 14 countries that are already involved in raising the 0.2% tax levy could create a coalition within the AU to share strategies and lessons, and also encourage others that are yet to come on board. Other member states could also create similar groups around shared values and interests.

Accountability: Enhancing open and transparent financial management

The adoption of the nine golden rules on financial management is a step in the right direction. However, more needs to be done. There is a need to enhance the channels of communication through which citizens can comment on, and access, reports on the AU’s financial processes. Through its newly developed application, social media, print and broadcast media, and other innovative communication channels, the AU should provide detailed and summarised analyses of its financial reports and deliberations.

The AU should also collaborate with member states and the private sector in providing this in as many African languages as possible. Similarly, there should be a window period that allows citizens to comment on the AU budget, request explanation on any aspect of its financial standings, and also be able to contribute ideas on spending and fundraising. In achieving this, the AU should mandate its member states to use all appropriate and innovative channels (social media, print and broadcast media, and other telecommunication channels) to inform citizens about the opportunity to access and comment on its processes.

The three ideational issues raised above are central to citizen engagement with the AU process. They allow for ownership of ideas and legitimacy of the AU to act on behalf of African citizens in enhancing regional integration. Adopting these measures can only strengthen ongoing reforms, and make the AU a genuine people-centred project.

(Main image: Minasse Wondimu Hailu/Anadolu Agency/Getty Images)

The opinions expressed in this article are those of the author(s) and do not necessarily reflect the views of SAIIA or CIGI.