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The African Union’s road to financial independence: Pragmatic or ideological?

African Union 50th anniversary
African Union Heads of State at the African Union's 50th anniversary summit held in Addis Ababa on 25-26 May 2013. Photo: Flickr / GovernmentZA
Maria Osula

 

Ahead of the 2017 Stockholm Forum on Peace and Development, SIPRI is pleased to share guest blog posts from partner organizations.

 

Faced with political instability, poverty, corruption, internal disputes, and extremist actors in its member states, the African Union (AU) is compelled to do more to manage these often-recurring problems. This requires financial resources.

But the AU’s financial resources have reduced since 2010, partly due to the internal political challenges in Algeria, Egypt, Libya, Nigeria and South Africa. These five countries have been the major financial contributors to the AU and their weakened capacity has resulted in an increased dependence on external partners such as the European Commission, at a time when many international partners but also African leaders wanted to increase African self-funding. The AU receives 60% of its funding from external partners and the more this dependence has increased, the more compromised the AU’s independence has become, and the less influence it has had on how the funds received can be used.

 

An ambitious move

Recognizing the continent’s challenges and the implications of financial dependence on external partners, the AU has set out to implement a range of structural and financial reforms. This includes the establishment of a self-financing mechanism that would see Africa become independent of external funding.

In 2016, former President of the African Development Bank Donald Kaberuka proposed an ambitious self-financing plan that would see the AU fund 75% of its programmes and 25% of its peacekeeping operations from 2017. The plan involves imposing a 0.2% levy on imports to African countries and considers other sources of funding, including levies on mining companies, airline industries, banking and telecommunications systems.

The self-financing is not just about being independent from external partners, but is considered a step towards ensuring that African states are responsible for and accountable to decisions agreed on by the AU.

African Union summit in 2016
Dr Nkosazana Dlamini Zuma opens the 27th African Union summit in Kigali, Rwanda on 13 July 2016. At the summit, AU member states commissioned President Paul Kagame of Rwanda to lead the African Union's financial reforms. Photo: Flickr / GovernmentZA (DIRCO)

 

Lessons from ECOWAS and challenges ahead

Self-financing is not new to the continent and the AU could learn a lot from the Economic Community of West African States (ECOWAS). ECOWAS is a sub-regional organization with a strong political leadership that has pushed forward a conflict prevention agenda in The Gambia and Burkina Faso. It is often lauded as a good example of a well-functioning regional body. This is not just in terms of ensuring financial compliance by member states, but in its inclusive approach that promotes the engagement of a wide range of actors including civil society organizations in conflict prevention and peacebuilding efforts. 

While there is acceptance that the AU can finance itself, borrowing from lessons learnt by ECOWAS, many people are sceptical about the implementation of the self-financing plan. It is a rather progressive approach that may end up falling through the cracks unless issues of inclusion, political will and institutional weakness are addressed. There is no doubt that there are challenges, a major one being the lack of local ownership since the process of Agenda 2063a framework for social and economic transformation of the continentand development of a self-financing plan was an exclusive process without citizen involvement. There is also a financial challenge, especially for poorer countries already struggling to make a contribution to the sub-regional bodies to which they belong, who will be expected to also contribute at the regional level.

Furthermore, in the past the AU has been unable to take disciplinary action against states that default on payments, and is seen as having in place many forward-looking policies that never get implemented.

 

More pragmatic steps

Peace and development in Africa is dependent on the ability of the AU to effectively and efficiently finance itself. However, leaders should recognize that the security and development challenges facing the continent are far too many and complex for the proposed self-financing plan to solely and adequately address, and it will take time before the proposed budgets can sufficiently deal with the issues.

Partnerships and reliance may still be necessary but African leaders should take the bold step and push for equitable partnerships. More importantly, self-financing should not be seen as the prerequisite for ownership. In other words, Africans should not have to pay more to ‘own’ their problems but should have ownership of the issues in the continent because it is their continent.

Recognition and a change of mindset at two levels is therefore necessary: Africans must recognize that it is not the responsibility of external actors to define their security and external actors must recognize that Africa needs to play a lead role in its own affairs.

 

About UCDP: The Department of Peace and Conflict Research was established in 1971 to conduct research and education on the causes, dynamics and resolution of armed conflicts. Today the Department is a leading center in peace research and home to the world’s premier source of data on armed conflicts—the Uppsala Conflict Data Programme (UCDP). We are also a Rotary Peace Center and offer a full range of educational programs that attract students from all over the world.

About Nordic Africa Institute: The Nordic Africa Institute (NAI) is a research centre on contemporary Africa with a special focus on political and social sciences. It is jointly financed by the governments of Finland, Iceland and Sweden.

ABOUT THE AUTHOR(S)

Maria Osula is a Masters student at the Department of Peace and Conflict Research at Uppsala University.

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