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Conference of Ministers of Finance kicks off on modalities of financing the African Union

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Conference of Ministers of Finance kicks off on modalities of financing the African Union

Conference of Ministers of Finance kicks off on modalities of financing the African Union
Photo credit: AU

The African Union’s financing requirements are increasing with the evolution of projects and development programs of the continent. This therefore underscores the need for reliable and predictable self-financing mechanisms of the AU operations and programs.

It is on this background that the conference of Ministers of Finance from Africa kicked off in Addis Ababa, Ethiopia on the 15th of September 2016 to look at the modalities of the implementation of the “Financing of the Union” decision taken by Heads of State and Government, during the 27th African Union Summit in Kigali, Rwanda in July 2016.

The two-day conference saw the Committee of Ten Finance Ministers (F10) convene to share ideas and best practices of implementing the decision.

The F10 representing the five African regions East, Southern, West, North and Central, met to discuss the draft terms of reference of the F10 which among others include; the review and evaluation of the annual budget of African Union before submission to the Assembly of Heads of State and Government of the African Union; Propose implementation mechanisms of the Import Levy in particular; the Collection of the funds, Transfer of the collected funds and Peace Fund Management Arrangements.

The F10 are also tasked with defining a roadmap for the implementation of the Decision, reviewing the Status of the implementation of the 0.2 percent levy on all eligible imported goods into the continent to finance the African Union operational, program and peace support operations budgets starting from the year 2017 while ensuring the effective use of these resources. At the same time, the F10 will review the compliance and adoption of the policies as well as propose the various resources mobilisation strategies for the Union.

Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission expressed appreciation to all member states, central bank governors and officials present for the milestone achieved. She described the achievement as a great deal for the Union to be at the implementation stage of the decision that was made in Kigali by the Heads of State and Government. Dr. Dlamini Zuma also emphasized the need for self-reliance of the Commission especially, as the driving force for Agenda 2063 and its 10 years flagship projects, which she added would be a challenge to realize, without sustainable financing.

She also urged the ministers of Finance to familiarize themselves with the AU Agenda 2063 and welcomed the Regional Economic Communities, such as ECOWAS and ECCAS experience-sharing of their self-financing model and the best practices.

Cabinet Secretary Henry Rotich, Kenya’s Minister of Finance while chairing the meeting, emphasized that the growing scope of activities of the AU does not match with the availability of the Union’s resources. “Our goal as Ministers is to ensure we come up with implementation procedures for sustainable financing of both the Union and its programs. This we shall do through brainstorming discussions as well as shared experiences from other countries and Economic Regions,” said Honorable Rotich.

The Deputy Chairperson of the African Union Commission, H.E Erastus Mwencha presented the draft guidelines for the implementation of the Assembly decision on financing for the Union. Mr. Mwencha encouraged the Ministers of Finance to be more involved in the budget-making process of the Union, the scope of how the 0.2 levy will apply and also identify areas in which the peace fund shall be applied.

The African Union Commission represented by the Director of Human Resources Management and Development Mr. Amine Idriss Adoum and the Director for Finance Mrs Assietou Sylla Diouf briefed the Ministers on the ongoing Human Resource reforms, capacity building reforms, strengthening of staff capacity through the AU leadership academy, the budget preparation process, budget breakdown percentages; all which the Union is overseeing to ensure accountability and efficiency of the African Union.

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