Africa set to finance its own development
This is a time of self-actualisation for Africa. At the 27th African Union (AU) heads of State and Government summit in Kigali, Rwanda, a financing mechanism has been adopted to enable the continental body to generate funds required for its activities starting next year. Africa has what it takes to mobilise its own finances to make the continent self-sufficient. The African leaders unequivocally resolved to generate the US$1.2 billion required to finance the AU’s core activities of peace-keeping operations and development projects starting next year. Out of the total AU budget, 25 percent will go towards peace-keeping operations while 75 percent will be for development projects. That’s US$900 million towards development projects. In setting this target, the African heads of State are changing the status quo, where currently 76 percent of financing for the continent’s core activities is done by the donor community while 24 percent was coming from Africa.
Under this plan, 100 percent of the financing will come from Africa. Donor support is welcome but it is not sustainable. And as we all know, support from the outside sometimes comes with strings attached. Therefore, the decision to start looking inwards is more than welcome because it reinforces the continent’s growing independence and economic freedom.
How will these funds be raised? Financing of Africa’s own programmes will start with a formula of 0.2 percent to be levied on eligible imports as applied uniformly by all countries. The money will be collected by respective revenue authorities and remitted in a special account at the central bank of member states. This formula of 0.2 percent levy will apply to all non-service imports, which have been categorised as all imports, with the exception of imports such as medicines, drugs and fertilisers. Our revenue authorities have over the years built enough capacity to raise substantial resources from taxes. This has given confidence to heads of State to start mobilising financial resources for the continent’s socio-economic development. Africa can only grow from its own resources – financial and human. This beautiful continent is endowed with massive natural resources as well as qualified manpower to take the continent where it desires to be.