The African Union (AU) is steadily advancing its path toward financial autonomy, with over two dozen member states taking concrete steps to implement the landmark Kigali Decision on Financing the Union, a move that is reshaping the continent’s approach to self-reliance.
Adopted in 2016, the Kigali Decision introduced a 0.2% levy on eligible imports as a sustainable source of funding for AU activities. By the end of 2018, 25 countries had begun integrating the policy into their national systems, with 16 having fully implemented the levy. Of those, 14 applied the funds toward their AU contributions that year—an unprecedented shift away from donor dependence.
Financial Ownership with Flexibility
While the AU grants member states flexibility in how they adopt the levy domestically, it maintains key principles: predictability, compliance, and transparency. This balance has encouraged more nations to commit to the policy, even as countries like Nigeria, Ethiopia, and Senegal continue aligning their systems.
Institutional Reforms Driving Accountability
The AU’s reform agenda, closely tied to the Kigali Decision, has resulted in the tightening of financial oversight. Notable changes include:
- Joint Budget Reviews: The Committee of Fifteen Ministers of Finance (F15) now works directly with AU committees to assess and approve budget proposals, strengthening oversight and ownership.
- “Golden Rules” in Practice: Eight of the nine financial management rules are currently operational, setting standards for discipline, transparency, and alignment with strategic priorities.
- Performance-Based Budgeting: Budgets are now allocated based on departmental performance, capacity, and previous execution rates. This strategy has curtailed inflationary estimates and promoted more effective use of resources.
In a strong signal of fiscal restraint, the Union trimmed its 2019 budget by 12%—down to $681.5 million—while increasing the share of the budget covered by member states to 66%, excluding peace operations.
Sanctions and New Assessment Scales
To ensure compliance, the AU has adopted a sanctions regime targeting late or non-payments, offering clear timelines and penalties. Simultaneously, a revised scale of assessment was approved for 2020–2022, aiming for equitable burden-sharing:
- Tier 1 countries contribute 45.151%
- Tier 2 countries: 32.749%
- Tier 3 countries: 22.100%
Annual contributions are capped at $35 million and bottom out at $350,000.
Eyes on the Peace Fund
Efforts are also underway to finalize a dedicated assessment scale for the Peace Fund, with AU High Representative Dr. Donald Kaberuka leading regional consultations ahead of the Niamey summit in June.
A Continental Shift
As the African Union reduces its dependence on external donors, the successful implementation of the Kigali Decision marks a milestone in African self-determination. The initiative is not only securing critical resources but also embedding a culture of fiscal discipline across the continent’s premier institution.