Building capacity to help Africa trade better

U.S. opposed to 0.2% import tax to fund AU


U.S. opposed to 0.2% import tax to fund AU

U.S. opposed to 0.2% import tax to fund AU
Photo credit: Rwanda Defence Force

The United States does not want a tax on imports proposed by African leaders to raise at least $1.2 billion annually to fund the African Union, a security symposium in Rwanda heard Wednesday.

Dr. Donald Kaberuka, who worked on team that proposed the levy, told the symposium that he did not understand why the US was against the idea yet it would make Africa stop asking for funding from Washington.

“It is 0.2% not 2%… the US government says this is a violation of World Trade Organisation (WTO) rules,” said Kaberuka, speaking at the 6th National Security Symposium in Musanze district, northern Rwanda.

He added: “I looked through the text of the WTO rules and its true the clause is there which is called ‘Treat everybody equally’… we are still talking to our American friends hope they come to a point where they realise that if there is peace, stability, progress in Africa – it will be a global public good.”

As Kaberuka spoke, the new US Ambassador Peter H. Vrooman was in the audience. But the former Rwanda Finance Minister, also former President of the African Development Bank, said he hoped the US envoy would “invite me for tea” even after the spat of the levy.

Financing of the Africa Union was a historic decision adopted by Heads of State and Government (HOSG) in a “Retreat on Financing of the Union” during the 27th African Union Summit held in Kigali, Rwanda in July 2016.

The Decision directed all African Union Member States to implement a 0.2% levy on eligible imports for to finance the African Union. The decision came into operations for each Member States from January 2017.

The annual budget of the African Union Commission is about $700 million – meaning the $1.2 billion that will be collected as a result of the tax levy will cover double what is needed today, explained Kaberuka.

The security symposium took place from 14-16 May 2018 and was attended by student officers from different countries at the Rwanda Defense Force Command and Staff College.

The students attending the college come from Rwanda, Czech Republic, Ghana, Malawi, Kenya, Uganda, Tanzania, Senegal and Zambia.

Dr Kaberuka was speaking on a panel shared with Rwanda’s Foreign Minister Louise Mushikiwabo and Ambassador Ron Prosor, former Israeli UN envoy and currently with the Hudson Institute.

They were discussing the theme: “Contribution of African home grown solutions to African problems – the AU perspective”.

It is not the United States alone that is not happy with the new tax. Very few countries have put the levy onto their books, months after it came into force.

Kaberuka told the audience that he was going to hold consultative talks with African Envoys in Washington this week to map the way forward.

“We have already found a solution with the AfCFTA,” said Kaberuka referring to the continental free trade pact adopted in Kigali in March, adding that Africa will be a single market so the levy will be on imports coming from outside the continent.

Kaberuka said the auto-funding formula being proposed for AU is the same used by EU to emerge from the devastation of World War 2. “So don’t tell me it can’t work,” he added.

Foreign Minister Mushikiwabo for her part narrated the story of Rwanda – how it has been able to come up with its own ‘home grown solutions’ to deal with the aftermath of the 1994 Genocide against Tutsi in Rwanda.

When asked what Somalia can do to get out of the mess it finds itself decades on, she said: “Just as Rwanda emerged 20 years after, Somalia will too. Somalia has incredible diaspora, coastline and many other assets… However, it all depends on whether Somalians are willing to change mindset and take the opportunity.”

Meanwhile, earlier, on another panel discussing deficiencies of UN peacekeeping operations, Rwanda army Chief of Defense Staff Gen Patrick Nyamvumba repeated Rwanda’s cry for review of mandating of peacekeeping missions.

Referring to the so called Kigali Principles, a set of global benchmarks adopted to protect civilians in conflicts zones, Nyamvumba said national governments should deploy their troops with mission to use force to defend themselves and the communities they are deployed.

Gen Nyamvumba, himself a former UN force commander in the troubled Sudanese region of Darfur, narrated how an Ambassador of a troop-contributing country confronted him after some of their soldiers were killed. The Ambassador apparently demanded that Gen Nyamvumba gives him assurance that no more of their troops would be killed. Nyamvumba told the audience that he firmly declined to give that “assurance”.

“This is serious business,” is how Nyamvumva put it in his explanation to the symposium, adding: “I would rather have 5,000 troops that are willing to do their job right, than have 20,000 that are [ineffective]….”

Former Netherlands foreign minister Arbert Koenders, contributing to the discussion also said for UN peacekeeping to work the UN and member states had to understand it needs ‘cost, risk and mandate’, otherwise the UN will be “bogged down for many, many years.”

National Security Symposium 2018

The three-day National Security Symposium 2018 jointly organized by Rwanda Defence Force Command and Staff College (RDFCSC) and the University of Rwanda (UR) was officially closed on 16 May 2018 in Musanze District. The NSS was held under the theme: "Contemporary Security Challenges: The African Perspective”. 

While officiating at the closing ceremony, the Rwandan Minister of Defence Hon Gen James Kabarebe thanked all participants and particularly speakers and moderators for the invaluable contribution and fruitful discussions.

“We have spent 3 useful days having inspiring and informative discussions all made to mentor and empower our students. The students you spoke to are drawn from many countries… so you spoke to almost the whole of Africa. Together with these students, we have all gained and learnt so much that will help us to confront the many security challenges ahead,” Minister Kabarebe noted.


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