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Financing the African Union: The strategic imperatives to eliminate dependency

AU members must make a correct reading of the current geopolitical situation and weigh the risk paused by excessive external dependency and the risk of losing credibility from the inability to implement their own decisions
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Many people in Africa do not understand, even less accept, the fact that in 2023 the African Union finances should still be so heavily dependent on outside parties. It does not have to be so. Africa can fund the African Union and its activities in a feasible manner. It is not lack of viable options on how to do so; it is rather due to lethargy, inertia, and lack of a sense of urgency.

The transformation of the OAU into the AU in 2002 was a major milestone. The objectives of an integrated, prosperous, and peaceful Africa driven by its own citizens and representing a dynamic player in the global arena were seen as worthy ambitions. By aiming at promoting unity, solidarity of African states, defending their sovereignty and territorial integrity, promoting social and economic integration, the AU would reflect the real ambitions of the continent.

It is important, however, to note at this stage that despite this transformation, the AU was still fundamentally an intergovernmental organisation not an illegibility-based body with clear-cut membership criteria and obligations.

Let us focus only on the issue of financing; at the birth of the AU, the top five economies of Africa (Libya, Nigeria, Egypt, South Africa, and Algeria), in an act of solidarity voluntarily opted to pay a large part of the budget, just over 50% of it. This high level of dependency on a few countries within the continent initially worked well, until some of the countries (such as Libya) were no longer able to do so in the wake of events in North Africa in 2010. At that point, it became clear that over-dependency on a few countries in Africa carried its own risks and that a solution was needed.

There was soon another problem: financing peace and security-related activities, such as stabilisation missions. It should be recalled that up to that point, such activities were generally assumed to be the responsibility of the United Nations. The African Union was never crafted or assumed to (have the mandate to) carry out such missions (which are) generally authorised and mandated by the UN Security Council and funded by the UN.

It soon became clear that a serious mismatch between the AU’s mandate and its means had emerged. It became also clear that for the AU to achieve this extended mandate into a new area such as peace and security, which is generally very costly, would require a new form of funding that was sustainable, non-volatile, and which was not dependent on a few countries, either AU member states or on the outside world. And yet, it is exactly this level of dependency, volatility, and lack of sustainability that has increased, and not diminished, over time.

This has two serious implications. The first one is programmatic: ability to pursue AU objectives; and second, geopolitical. In other words, the over-dependence compromises Africa’s global interests.

The paradox, though, is that Africa can actually afford to fund itself without placing excessive burden on any one country. It is often difficult to convince people that self-financing is actually possible for a body whose own headquarters and other facilities were built by friendly countries, especially China (and later Germany). It is to be recalled that the AU Commission Headquarters and the Africa CDC facilities were financed and built by China. In the same spirit, the (construction of the) Julius Nyerere building, which houses the Department of Political Affairs, Peace and Security, was funded by Germany.

This is not to say that cooperation with friendly countries, when interests are aligned, is necessarily a bad thing. It is only to say that excessive dependency could and does lead to serious misalignment of interests.

But how much does the AU require for its activities? If we exclude the costs of peacekeeping or stabilisation missions, the current budget of the AU is about USD 655 m, of which USD 163m for administration, USD 293 for programs, and USD 253m for peace and security-related activities (excluding peace keeping missions).

Truth be told, as budgets of international organisations go, these are quite modest sums. However, if peace keeping and stabilisation is (are) included the sums required are quite large. To give an idea, if the AU was to deploy a mid-sized multidimensional peace and stabilisation mission in a particular country, the cost at minimum per annum would consume the entire budget of the AU. In fact, this has happened in the past, such as when the AU had to deploy a mission in Mali which consumed the entire reserves of the organisation. This is why missions, which are purely mandated and authorised by the AU are still so heavily dependent on donors, the example being the former AMISOM in Somalia, which was almost entirely dependent on the European Union.

So, the simple conclusion is therefore that the organisation is under resourced for its basic activities, and is not equipped to deal with peace keeping and stabilisation missions. The key questions for the AU are:

1) How do we close the gap between mandates and resources and ensure that countries fulfil their obligations, and what to do if they do not?

2) How do we ensure that when it comes to peace and stabilisation missions, on matters which are deemed to be a threat to international peace and security the AU obtains funding from the United Nations?

3) How do we ensure sound financial governance, accountability, value for money and overall transparency in the activities of AU organs, such as how they select their leaders and personnel?

4) Finally, how do we deepen the relevance of the AU for ordinary African citizens and demonstrate the pertinence of its activities to the people?

These are all well-known issues. This is why at the AU summit in 2016, the AU leaders considered that these matters were urgent enough (for them) to request President Paul Kagame of Rwanda to lead the process of reform at the top of which was financial independence, better governance, relevance, and voice internationally.

It is in that context that a financial proposal was put on the table aiming to generate about USD 1.2 billion per annum and was unanimously adopted. It is not necessary at this point to go into the details of the proposal. Suffice (it) to say that it was based on a rigorous assessment of the needs of the AU, how similar organisations across the world fund themselves, and how the cost could be equitably distributed among African countries.

Although this proposal was extensively discussed and unanimously approved, at the moment of writing only 17 countries are implementing it without any particular challenges or difficulties.

This is where the problem of the AU often lies. The implementation crisis. Since its inception, the AU has oftentimes taken decisions but then failed to implement them and since the organisation is a voluntary and not an eligibility body, there are no consequences for lack of implementation.

The AU in theory has a regime of sanctions that are supposed to be levelled against countries that do not fulfil their financial obligations. But it has not been very effective. The incentives and disincentives of fulfilling obligations are misaligned. Therefore, some countries implement decisions, others do so only in part, and others fail to do so at all. As earlier pointed out, this is not a technical, financial, or legal issue. It is one of political will.

Those who do not fulfil their obligations often say that the AU is an organisation far removed from ordinary concerns of the people. In other words, a relevance problem. They also sometimes claim the need to see greater transparency and accountability. Oftentimes, it has also been said that the AU has become a huge bureaucracy with too many organs which are overstretching the abilities of members. The irony of that is that the AU has expanded precisely because member countries keep expanding its remit and piling new responsibilities on it.

These are all understandable reasons. And this was the whole point and spirit of the reforms led by President Kagame, which included financial “Golden Rules,” greater transparency in the organisation, and deepening relevance for ordinary people. All these reforms are underway. Some are complete, others work in progress. Some are a bit more complex, but still a must-do. None of these can be achieved until member countries take up their responsibilities fully.

There is another argument often advanced, which does carry a lot of weight and that is the whole issue of the division of labour between the AU organs and regional economic communities (RECs). This is a key point. It is quite critical that the AU and the RECs demonstrate and implement the two key principles of comparative advantage and subsidiarity. In other words, activities that can be accomplished at lower levels or within the competencies of RECs are not duplicated at higher levels. Duplication is not only costly but also inefficient.

The issues articulated above have all been addressed in the process of the reform. But it is important to shift the gear up and a step change in the implementation. AU members must make a correct reading of the current geopolitical situation and weigh the risk paused by excessive external dependency and the risk of losing credibility from the inability to implement their own decisions.

The strategic argument being deployed here is a straightforward one. So long as Africa continues along the path of external dependency, whether on peace and security, pandemic management, food security, those geopolitical risks will increase, not diminish. Of course, we are fully aware that there is this whole issue of global public goods, such as climate financing or threats to global peace that cannot be the responsibility of Africa alone, since they require collective responsibility.

AU members need to understand that we are entering an era where the Global North is focused on its own priorities, such as energy security, defence spending, and a whole range of social issues. This means that their attention span on what has been technically called International Development Cooperation is at its lowest since World War II with multilateralism at its weakest at a time when it is needed the most.

For the AU and its members to project Africa’s interests globally, the least Africa can do is to fund its organisation. It is possible, it is feasible, and it is existential. Anything else is not a viable policy. It is an alibi for the absence of one.

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