The African Union (AU) continued to grapple with implementing its important and difficult reforms also during the past year. While there is very welcome progress in particular in terms of decreasing arrears with assessed contributions, many reform projects face significant obstacles. Below, I summarize the Assembly and Executive Council decisions from January/February 2022 on AU reforms and funding.
Member state assessed contributions
EX.CL/Dec.1162(XL), article 2-10; Assembly/AU/Dec. 838(XXXV)
In an encouraging sign of reversal of trends in the mid-2010s, Member States have paid 88% of their assessed contributions in 2021.
Somalia, Libya, Burundi and Seychelles had received exemptions for inability to pay, and are on payment plans. Somalia, Sechelles and Burundi have cleared their arrears by February 2022. The Assembly has also decided to write off 50% of Libya’s arrears, “given the well-known long-standing complex situation”.
The following states are under sanctions for not paying assessed contributions on time:
- Cautionary sanctions: Sao Tome and Principe, Guinea and Congo. These states lost their speaking right at AU meetings
- Intermediate sanctions: South Sudan, which has lost voting rights, office eligibility, recruitment of South Sudanese nationals, among other things. Note that South Sudan has an ongoing process with Sudan on assessed contributions (EX.CL/Dec.1119(XXXVIII).
The current Scale of Assessment, allotting percentages of the AU budget to Member States according to their financial capacity and political willingness, will be extended by one year. The new scale will apply to financial years 2024-26, and will need to reflect in particular challenging discussions on whether it also applies to the Peace Fund, where some regions have complained about being solicited too much compared to others. Opposition comes particularly from the North bloc, and the Executive Council further delayed a decision on the matter until July 2022.
EX.CL/Dec.1162(XL), article 3
The Peace Fund stood at $252 million in February 2022. The original plan was to endow the Fund with $400 million by 2020. The operationalization of the Fund continues to be challenging, but already last year, the Fund apparently generated some interest.
AU financing reform
The implementation of the 0.2% levy continues to stall. A deadline for reporting on the progress of the reform has been extended to February 2023.
Dealing with dormant funds
(EX.CL/Dec.1143(XL), article 16)
The Executive Council decided to close seven dormant funds. Differences between ledger balances and actual bank balances are vast and member states surely must have raised questions about almost $22 million missing from these accounts. Such dormant funds are also a testament to challenges in professional AUC accounting throughout the 2010s.
Implementation of Golden Rules for Financial Management
EX.CL/Dec.1143(XL), articles 17-18, Assembly/AU/Dec. 821(XXXV)
Agreed in 2018, the Golden Rules for Financial Management and Accountability have become important norms and goals for AU Member States’ supervision of AUC financial management. In what seems to evidence considerable delays with the full implementation of the principle that all AUC revenue must be predictable and accounted for, the Executive Council criticizes the AUC does not fully use its AMERT system (Africa Monitoring, Evaluation and Reporting Tool).
The only Golden Rule officially not implemented is the harmonization between the SAP systems used by the Finance department, and AMERT used by Strategic Planning. Here, Member States are losing patience and for the first time hint at giving up on AMERT: “The AUC should work on the AMERT system to enhance the effectiveness and efficiency of the system, and if AMERT is no longer fit for the purpose, finance should start using the project module in SAP for planning, monitoring, evaluation and reporting projects performance, or look for any other suitable system.” EX.CL/Dec.1143(XL), article 18.iv.
Pressure is also mounting on International Partners (IPs) who do not deliver on their funding pledges. While the AU cannot sanction IPs like Member States if they do not pay on time, the February 2022 decisions are a clear criticism of lackluster delivery on IP funding commitments:
“Partners with low funding as compared to the pledges made should be engaged early during the budget year and strong commitments should be sought from Partners before programmes are put in budget proposals” EX.CL/Dec.1143(XL), article 18.iv.
Finally, the Assembly also adopted new Revised AU Financial Rules, which will hopefully streamline financial management and compliance with international public financial management standards.
AU Partnership Strategy
EX.CL/Dec.1143(XL), article 37-38
After years of delays on similar efforts assessing and guiding AU partnerships, the AU is now set to approve the new AU Partnerships Strategy and Policy Framework in June/July 2022. For a good backgrounder, see this ECDPM paper by Philomena Apiko: https://ecdpm.org/publications/getting-partnerships-right-case-au-strategy/
Across all partnerships, Member States continue to try to maximize participation of all Member States in line with an important decision on participation Assembly/AU/Dec.762(XXXIII), of February 2020, in particular:
Assembly Decision No. Assembly/AU/Dec.762(XXXIII), of February 2020, which decided that: “African Union/African Continent shall be represented at the Statutory Meetings of partnership between the African Union/African Continent and a partner country by the Members of the Bureau of the Assembly of the Union, the Chairpersons of Regional Economic Communities (RECs), the Chairperson of the Heads of State and Government Orientation Committee (HSGOC) of AUDA-NEPAD and the Chairperson of the AU Commission”.
AUDA-NEPAD’s budget challenges and delays with the African Development Fund
EX.CL/Dec.1143(XL), article 68-73
Taking a stance on the intended differentiation of the AUC as a policy organ and the AUDA-NEPAD as an implementing actor, the Executive Council recalled its mandate to AUDA-NEPAD to undertake “the full range of resource mobilization”. The implication of this stance is that several departments of the AUC would have to wind down their substantive development-related activities, as AUDA-NEPAD should be “coordinating, facilitating and promoting cooperation with Africa’s strategic stakeholders and partners to ensure effective resource mobilization.»
This stance arises in the context of “budgetary challenges facing AUDA-NEPAD”. In addition to unpaid funds, there is also a need for a “basket fund for unused funds from partners”. Given that AUDA-NEPAD usually has contracts with highly specific modalities and policy purposes, that endeavor will be hard to implement.
The African Development Fund, first agreed in principle by the Executive Council in 2019, is still not operational, and is now due to be operationalized by the end of 2023. Note that this is a different instrument than an identically named African Development Bank (AfDB) instrument.
Domestic resource mobilization and Illicit Financial Flows
EX.CL/Dec.1144(XL), articles 57-73
After a period of relative silence on the implementation of the 2015 Mbeki report, the AU now seems to be keen to gear up efforts to increase Africa’s fiscal base. The AU is creating a “Continental Platform on African Tax Issues to improve Domestic Resources Mobilization and fight against IFFs on the continent”. It furthermore is advancing in the creation of the “African Diaspora Finance Corporation” (ADFC)
Dates of 2023 Summit
- Forty second (42nd) Ordinary Session of the Executive Council, 15 to 16 February 2023;
- iii) Thirty-Sixth (36th) Ordinary Session of the Assembly, 18 and 19 February 2023.