- ‘Heavy reliance on foreign financers makes AU toothless’
News Analysis
Extreme financial reliance on foreign donors has curtailed the political leverage and weakened the decision-making ability of the African Union argue experts as the call for self-financing of the continental bloc grows.
Considered widely as a toothless institution, the Union has been struggling to emancipate itself from financial dependency.
Some of the critics of the 55 States Union had even gone as far as to criticize the bloc as an organization that was unable to build its headquarters. In 2012, the Union came under fire from some critics after it received a 200 million USD headquarters fully funded and built by China as a gift.
Arguably, the union is also seen as a weak decision-making body with some attributing it partly to the financial issue of the organization. Its heavy dependence on foreign funding according to the experts put a hurdle in its efforts to fully liberate the resource-rich continent from the yoke of colonialism.
Over the years, the bloc launched various initiatives to overcome its financial reliance and expand self-financing schemes.
In the Kigali Decision in 2016, member states pledged to finance the Union by contributing 0.2 percent of their levy, there have been no big headways to date though.
Recent figures reveal that around 15 members out of the 55 states have been living up to the pledges. And, many float the idea that financial constraint makes the Union to be a rubber stamp institution, succumbing to the interests of donors.
The bloc relies heavily on partners to fund its activities, with two-thirds of its 2023 budget drawn from external sources, a report by Institute for Security Studies indicated.
“African Union is a toothless lion. Being financially dependent on external donors brought it into self-abnegation. This is forcing the countries to bow down to the interest of financers”, argues Dawit Mezgebe Tsegaye, a lecturer at Dila University and Ph.D. candidate of African and Asian studies at Addis Ababa University speaking to The Ethiopian Herald exclusively.
The union also faced unpredictability and volatility of its revenues because of dependence on external partners and few member states’ contributions, hampering efforts of addressing historical challenges.
Back in 2017, Paul Kagame spoke at a Consultative Meeting on African Union Reforms in Kigali, saying “The decisive factor here was changing our mindset from dependence to ownership, and from “we can’t” to “we can”. That is an asset that cannot be imported. The levy is the formula we came up with to assure our independence as Africans. This is first and foremost a choice to no longer be dependent on outsiders. It’s really about the value we attach to being effective and self-reliant as an organization and as a continent.”
“Since its establishment in 1963, the African Union has not been able to be financially independent due to multiple factors. The colonial legacy and Africa’s domestic political instability are some of the major factors,” Dawit added.
Dawit mentioned that Kigali’s Decision to contribute 0.2 percent of the nation’s import income is based on the amount of goods and items imported from the outside world. And, the relation between the African nations and the global economic powers determines the quantity.
For the Angolan Ambassador Jorge Catarino Cardoso, Director of the Africa, Middle East, and Regional Organizations Directorate of the Ministry of Foreign Affairs, other challenges play into the weak financial contribution of member states. He said that African nations have dealt with a number of global challenges including the COVID-19 pandemic and conflicts in Europe and the Middle East. To this end, African nations were unable to commit themselves to the Union. Yet, member states will remain committed to their obligations to the AU, he added.
Further, Dawit noted that though Africa and other nations have established the non-aligned Movement, Africans cannot escape the domination of the West. Such domination is structural and it negatively affects the economics of the latter, adding “Africa is a resource-rich continent, but it is politically and economically mismanaged. It is directly and indirectly affected by external factors.”
The expert elucidated that the European Union, for example, is intelligently collecting its budget support from member states, and such action is a luxury for African countries. The African Union should draw a lesson from other blocs like the European Union (EU) on how to collect what is promised.
“The 0.2 percent contribution is for the Union and Peace fund. Africans are not contributing putting us under the mercy of donors and blocs supporting us.”
Multinational companies like banks are investing in Africa; Airlines are passing through the continent. Accordingly, the African Union must create a sort of mechanism for generating its own income from these opportunities, he added.
African states and leaders should have full commitment to come closer and work. They need to understand the importance of financing the Union. “We need to have very strict rules and regulations on financing the Union with transparency and accountability. We, Africans, must be unified to have a strong Union.”
Regarding political meddling in the internal affairs of African nations, scholar, Africans have been under the colonial legacy since the colonial period; even West African states are still dependent on their colonial masters. Yet, there is an external interference in Africa’s internal politics. This interference has also an impact on Africa’s domestic economy.
BY DANIEL ALEMAYEHU
THE ETHIOPIAN HERALD SATURDAY 17 FEBRUARY 2024
