Ministers Brainstorm on ways to set in motion AU’s Financial model

clear vision

African finance ministers on Saturday discussed sustainable ways to further implement a decision of the African Union (AU) on a 0.2 percent levy on eligible imports.

The AU’s Committee of Finance Ministers (F10), responsible for the decision, met in the Rwandan capital Kigali to review the progress made in implementing the decision of AU heads of state and government.

The AU’s continued heavy dependence on external partners for funding is unsustainable, and the union requires adequate, reliable and predictable resources to ensure sustainable operations of its continental affairs, said F10 chairperson Abdoulaye Sabre Fadoul at the meeting.

“We need to find sustainable ways that will ensure that countries do not face difficulties in implementing the 0.2 percent levy on eligible imports aimed at financing the AU,” he said. “It is my hope that we the F10 countries will set the pace and lead from the front on the implementation of the levy.”

Fadoul, who is also the finance minister of Chad, noted that the AU is undergoing reforms led by Rwandan President Paul Kagame and that the success of the process depends on the support accorded to it by the finance ministers, urging countries that have not started implementing the decision to do so as soon as possible.

The F10 comprises Algeria and Egypt representing northern Africa, Kenya and Ethiopia representing eastern Africa, Chad and the Republic of the Congo representing central Africa, Ghana and Cote d’Ivoire representing western Africa, and South Africa and Botswana representing southern Africa.

AU heads of state and government adopted the “Financing of the Union” decision during the 27th AU Summit held in Kigali in July 2016.

The decision directs all AU member states to implement a 0.2 percent levy on eligible imports for financing the union.

The levy is expected to be derived from 0.2 percent of the value of the eligible goods imported into an AU member state from a non-member state.

The levy was scheduled to be applicable and be instituted in 2017 to finance 100 percent of operational budget, 75 percent of program budget and 25 percent of budget for peace support operations of the AU as well as for any other expenditure of the union that may be determined by the AU assembly, the supreme organ of the union.

As of December 2017, 20 member states were at various stages of implementing the decision, said a statement issued by the Rwandan finance ministry on Thursday.

Fourteen among them — Kenya, Ethiopia, Rwanda, Chad, Djibouti, Guinea, Sudan, Morocco, the Republic of the Congo, Gambia, Gabon, Cameroon, Sierra Leone and Cote d’Ivoire — had already started collecting the levy and deposited the funds at a dedicated account for the AU opened with the central banks, it said.

Ghana, Benin, Malawi and Senegal have initiated internal legal and administrative processes to allow implementation of the decision.

Despite their national economic and legal constraints, Mauritius and Seychelles have also indicated full commitment to the principles of financing the union, said the statement. Enditem

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