Financing the AU
WHAT IS FINANCING OF THE UNION
Financing of the Union is 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 directs all African Union Member States to implement a 0.2% levy on eligible imports for to finance the African Union. The decision will enter into operations for each Member States from January 2017.
O.2 % LEVY
The continued and successful implementation of the Union’s programmes require adequate and predictable, sustainable funding. On average, 67% of assessed contribution is collected annually from Member States. About 30 Member States default either partially or completely on average, annually creating a significant funding Gap between planned budget and actual funding, which hinders effective delivery of the African Union’s agenda.
WHAT CONSTITUTES ELIGIBLE GOODS?
The AU import levy will apply to the Cost Insurance and Freight (CIF) value at the port of disembarkation for imports arriving by sea and road and the Customs value at the airport of disembarkation for goods arriving by air.
THE UTILIZATION OF THE LEVY
The levy will be used to finance the Operational Budget, Program Budget and the Budget of the Peace Support Operations of the African Union
THE APPLICATION OF THE LEVY
The taxable base of the AU import levy will be the value of eligible goods originating from a non-Member State imported into the territory of a Member State to be consumed in the Member State.
The Gap between the planned Commission budget and actual budget that is funded by both member States and the Partners: 2011- 2015
The Operational Budget is used mainly to Finance the cost of running the Union, its Organs, Specialized Technical Agencies, its representational offices and agencies across the world.
The programme budget of the Union covers the execution of programmes approved by the Assembly ...
The Peace Fund is used to finance the AU’s peace and security operations. The Fund covers operational activities such as Mediation and Preventive Diplomacy, Institutional Capacity and Peace Support Operations.
ESTIMATED AU BUDGET: 2016 - 2020
DOES THE 0.2% LEVY CONTRADICT INTERNATIONAL NORMS
The 0.2% levy is not in contradiction of others international agreements and variations of similar levies are already being used by several regional organizations globally.
ACCOUNTABILITY OF THE AFRICAN UNION COMMISSION
In accordance with the AU Financial Rules and Regulations, the Commission is tasked with ensuring strong accountability mechanisms for the effective, transparent and prudent use of resources through stringent implementation of Executive Council and Assembly decisions ...
THE COMMITTEE OF TEN MINISTERS OF FINANCE
The Committee of Ten Ministers of Finance, otherwise referred to as the F10, is responsible for reviewing the annual budget of the AU and proposing mechanisms for implementation of the decision on Financing of the Union.
HOW DOES THE AFRICAN UNION ACCESS ITS DUES FROM MEMBER STATES?
Each country will select the appropriate financial institution(s) or Customs authority responsible for assessment and collection of the AU import levy. Once the Revenue is collected as AU import levy, it is then deposited into an account opened in name of the ‘African Union’ with the Central, National or Reserve Bank of each Member State.
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