Financial independence as the antidote to external political interference

BY KFLEEYESUS ABEBE

The Organization of African Union (OAU) was established to liberate the continent from the remaining leftovers of colonization and apartheid. Promoting unity and solidarity, realizing development, and safeguarding the sovereignty and territorial integrity of Member States are also the bloc’s major objectives. As OAU realized the independence of African countries, the successor, African Union is tasked with ensuring the peace and political sovereignty of the continent. At the heart of the challenges facing these noble yet tall order missions is the extreme financial dependence on external donors.

The irony is the very countries and organization in which the Union aspires to detach itself from political impositions is still extremely reliant on them for its financial sources.

The financial reliance on external donors forces the organization to compromise its political autonomy, decision capacity, and project planning because it has to abide by the preconditions of donors. African Union is still sourcing 75% of its income from external donors to finance its various projects; the issue is heeded by the bloc though. There have been a series of meetings over the issue and agreements have been reached.

At the June 2015 AU summit in Johannesburg, the Assembly decided that AU members would try to achieve the following financing targets: 100% of the operational budget, 75% of the program budget, and 25% of the peace support operations budget. The following assembly 27th AU Summit in Kigali brought a landmark agreement with the assembly deciding to implement a 0.2% levy effective since 2017 on all eligible imported goods. This was meant to finance the AU’s operational projects, programs, and peace and security operations budget.

However, the levy has not been universally implemented. As of June 2020, only 17 of the 55 AU member states have adopted the decision. And while these funds are being collected, they are not remitted in full by some member states. The biggest challenge with the implementation of the 0.2% levy is that it was mainly a political commitment with little guidance on its implementation. Now, this reluctance is putting the organization’s projects in jeopardy. The Executive Council has recommended that the AU Commission reprioritizes its activities, canceling some projects short of the required budget.

This is the first time the council has made such a proposal, and its implications still remain unclear. Although this could be considered a move in the right direction, the implementation of key initiatives – particularly Agenda 2063 – will now rely entirely on the ability of the AU to mobilize resources within the continent rather than externally. In the past, this has proven to be an uphill battle, as most proposals are adopted in principle and no action is taken for their implementation.

In his speech at the 39th Ordinary Session of the Executive Council, Chairperson of the African Union Commission, Moussa Faki Mahamat said financial independence is tantamount to preserving the sovereignty of the Union.

As for him, the Draft Program-Budget of the foreign minister will dwell “focused on the urgent need to strike a balance between the usefulness of partner funds and the need to preserve the sovereignty of the Union.

The two components of such a balance have been identified as, on the one hand, the non-acceptance of funds from partners with conditionalities out of step with the fundamental values of our Union and, on the other hand, the financing from own funds the programs of the Union deemed sensitive.”

Dr. Samuel Teffera who is a lecturer at the Center for African and Asian Studies told The Ethiopian Herald that the risk of financial dependence goes beyond achieving developmental ambitions. Financial dependence would expose the organization to fall prey to donors. So, it is high time to be self-reliant and decide one’s own destiny, the lecturer added.

“Anything dependent on aid won’t give you the chance to freely identify one’s problem and chart out a plan to solve problems. You can’t mobilize your resources, your knowledge, and your institution, you will be forced to expect and follow one’s guidance and plan. In addition, it would open a door for the sponsor to inject political motives.

Even if they do not have political motives, they would use it to benefit their people, gain the economic benefit, or other things they took as a target. Generally, donations and loans that come from the EU, US, and other countries will have preconditions you must fulfill. This means you will not be free to design your own projects that would solve African problems. If you go against , you won’t get the finance. So, financial independence is this much critical. ”

In the meantime, the scholar suggested the organization to encourage member states to fulfill their commitment and prioritize projects based on urgency and relevance. If the ranked projects are achieved, the Union could also be strong and financially secured, Dr. Samuel hopes.

“It is important to revise the organization’s 2063 economic and political goals and flagship projects. The organization should prioritize projects that realize political and economic goals. It should prioritize projects that encourage cooperation and realize economic and political integration. For instance, the African Continental Free Trade Area and power generation projects such as GERD and Inga Dam Project are very important projects that would have a strong impact on various aspects of African peoples. It would encourage intra trade that would substitute imports and help increase the foreign currency reserve of nations. If these are possible, nations would not easily kneel down for foreign interveners. Economic cooperation also helps to decrease border conflicts as people related in business the rate of conflicts usually decreases. ”

Dr. Samuel also indicated that it is not plausible to expect foreign donations as the world is being plagued with various manmade and natural challenges including Coronavirus Pandemic. So, the AU would be forced to rely on its internal income sources or else it would be a passive organization.

According to the Executive Council Decisions of February 2021, the AU’s total approved budget for 2021 is US$623 836 163, of which 32% of it is to be financed by member state contributions, and the rest 65% will be financed by external partners.

Figures show that fewer than 40% of AU member states actually pay their contributions to the institution. So, if the ambition of liberty, development and political inclusion is to be realized, the bloc needs to collect commitment from the recent 60% of member states which are still not fulfilling their promises. As for the Moussa Faki , African nations should pay their 0.2 levy or if not more to maintain the sovereignty of their organization and their respective countries at large.

The Ethiopian Herald October 16/2021

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