AU decrees import levy

Source: AU decrees import levy | The Herald July 18, 2016

Lloyd Gumbo in KIGALI, Rwanda—
African Heads of State and Government have resolved that all member countries charge 0,2 percent levy on all eligible imports, a fund meant to finance the African Union and move it away from donor dependency.The money will go towards supporting the AU’s budget and programmes. This was resolved at a Retreat of Heads of State and Government that ran into the night on Saturday where they also resolved that all the five economic blocs in Africa contribute $65 million each annually towards the AU’s peacekeeping operations.

In an interview with the Zimbabwe media yesterday, Finance and Economic Development Minister Patrick Chinamasa, who accompanied President Mugabe here, said the resolutions were expected to go a long way in capacitating the African Union that has been facing financial challenges due to failure by some member-states to remit their contributions.

“The retreat yesterday came up with a momentous decision that every country is going to be obliged to impose a 0,2 percent import levy on eligible imports and that money will go into an escrow account and go directly to the African Union without coming to the fiscus, which is effective for the 2017 AU budget,” said Minister Chinamasa. The retreat was attended by Ministers of Foreigns Affairs and Finance.

“For peace missions, each of the five regional groupings such as Sadc, Ecowas, EAC and so on, will be required to pay $65 million annually for peace operations, preventive diplomacy and so on so that we have ownership of the decisions and operations that we take.” At the moment, AU member-states have been contributing to the AU budget on the basis of the size of their Gross Domestic Product.

However, the remittances have been irregular with other countries not contributing at all, a development that has incapacitated the continental bloc. As a result, the AU has to depend on development partners, a development that has been criticised for taking away self-determination and independent decisions on its activities.

“So this meeting has been historic in the sense that yesterday (Saturday) there was a retreat of the Heads of State and Government including ministers of Foreign Affairs and ministers of Finance to deliberate on how best to fund the AU budget, programmes and peace missions.

“This is following up on a decision, which was taken by the Summit in Johannesburg which decided that we should work progressively over the next five years to make sure that members of the African Union carry the financial burden of their organisation. So they agreed that over the next five years, we should work towards meeting 100 percent of the AU budget, 75 percent of its programmes and 25 percent of its peace operations.

“But the assessment on the basis of GDP will remain. If that money was paid in full, we would not have the problems that the African Union is encountering. But the method of payment and procedure for collection is going to be different. The 0, 2 percent levy will mean that the revenue collection will now be predictable and remitted timeously. That will help the AU to plan for the future on the basis of available resources,” said Minister Chinamasa.

He said it was also agreed that African ministers of Finance will enhance their oversight over the AU’s finances to promote accountability. Minister Chinamasa said African leaders also raised concern about the paradox where the continent is rich in resources while its citizens have low-level living standards.