THE financial independence of the African Union (AU), launched in 1963 as the Organisation of African Unity (OAU) before being renamed in 2002, has been a source of controversy for a long time, as much of its working budget comes from foreign donors.
The expanse that is the AU headquarters in the Ethiopian capital of Addis Ababa resembles a Christmas-tree of foreign donations.
The AU’s largest programme, the Peace and Security Committee with a US$900 million budget, is basically funded by donors almost in entirety.
It is housed in a US$30 million building built by Germany.
More so, four years ago the pan-African bloc moved into its new headquarters, a glamorous building put up for it for free by China, at a cost of US$200 million as a ‘gift to the people of Africa’.
Even more tragic are the revelations that 96 percent of the programmes budget at the AU is borne by external donors such as the European Union (EU), Japan, USA, Turkey, World Bank and China.
This means funding for key institutions such as the Pan-African Parliament, the Human Rights Commission and the Anti-Corruption Board come from donors, making the continent vulnerable to manipulation.
At present, the 54-member bloc sources only 28 percent of its half billion dollar operational budget from its own members.
South Africa, Algeria, Nigeria, Egypt and Libya provide about 65 percent of the African contribution.
The AU was once heavily bankrolled by the late Libyan strongman Muammar Gaddafi, who championed the institution as a means to challenge Western hegemony.
Who then is really in charge at the AU?
Who decides what initiatives and developmental projects are to be embarked on?
The AU has been finding itself in difficult situations since the finances from donors almost always come with strings attached.
The new AU Chair, President Robert Mugabe said Agenda 2063, which envisages harnessing human and natural resources for the benefit of all Africans, would be stillborn if the continent continued relying on those who were growing fat on the back of its exploitation.
“Our lofty ideals in Vision 2063 would come to naught unless we take strong and decisive steps to confront the financial challenges confronting our continent,” said President Mugabe at the closing ceremony of the just ended 24th Ordinary Session
“A situation where over 70 percent of the AU budget is foreign funded is certainly unsustainable.
“It is also a serious threat to the security and wellbeing of our people.”
Kenyan President Uhuru Kenyatta also said the dependence on foreign financing was a profound handicap and an impediment to the continent’s momentum.
“Depending on external funding for the Union’s budget is simply unacceptable,” he said at the just ended summit, calling for Africa to assert “its independence and sovereignty more robustly.”
The bloc however made a big breakthrough by adopting a plan to drastically reduce its dependence on foreign funders for the next five years.
African leaders embraced a resolution for alternative sources of funding to enable the AU to fund 100 percent of its running costs at least 75 percent of its programme expenses, and at least 25 percent of peacekeeping operations within the next five years, and to cumulatively build on this till it is able to fund its entire budget.
The bloc proposed a US$10 tax on flight tickets to and from African destinations, plus a US$2 tax on each night spent in a hotel.
It is estimated that the levies will pull in US$730 million a year.
An additional half-a-cent tax on SMS exchanges would bring in US$1,6 billion, according to AU officials, who are hoping to see the bloc able to fund its operations and projects to the tune of 65 percent by 2016.
However, AU Chair, President Mugabe rallied member-states to walk the talk by exploiting the alternative sources of funding they had agreed on in order to wean the continent off over-reliance on external co-operating partners.
“This Summit has, therefore, to adopt several important measures aimed at broadening the financial base of our organisation and the viability of our programmes,” President Mugabe said.
“Let us walk the talk, and immediately start implementing the alternative sources of financing that this Summit has embraced.”
The anticipated windfall would shake off institutional aid dependency and ease pressure on key donors Libya and Egypt, which cannot afford to contribute at the same levels as before.
While African heads of state agreed in principle to the proposals, the application of the taxes will be initially on a voluntary basis leaving each member state with the choice of executing the new taxes.
Whether the plan takes off, however, remains to be seen even as AU members will additionally have to respect a new, higher threshold for contributions calculated on the basis of their Gross Domestic Products.
It will be a tough battle for the Chair President Mugabe.
Resistance is already registering from tourism players who feel the industry is unduly targeted, especially as resource industries are off the hook.
However, as long as the bloc depends on the West, any position the AU takes will be akin to a toothless bulldog.
This is the time for the continent to liberate itself from foreign donors (the West).
It is the time for the rebirth of an African body that drives the African Agenda and defends Africa’s interests without first ‘seeking consent’ from donors from the West or East.