The African Union has approved to institute a levy of 0.2 percent on eligible imports, in order to address the funding challenges the African Union has faced since its inception to help raise $1.2 billion starting 2017.
The move is aimed at reducing its reliance on foreign donors replacing almost 70 percent of external donor funding.
According to the Rwandan Finance Minister Claver Gatete eligible imports exclude products such as medicines, fertilizers and baby food.
This will avail $1.2 billion to the AU annually, replacing almost 70 percent of external donor funding.
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The projected budget collection of 1.2 billion U.S. dollars surpasses the previous budget of 427 million that was allocated for 2015/2016.
The just ended #AU2016Kigali Summit signals change in the way #Africa does business! Efficiency, focus &quest for self-reliance.
— Louise Mushikiwabo (@LMushikiwabo) July 19, 2016
Implementing decisions on financing the Union, the #AfricanPassport, FreeTrade, #Energy, & more in #Agenda2063, #Africa is indeed rising.
— Dr Dlamini Zuma (@DlaminiZuma) July 19, 2016
The African leaders agreed to operationalize the Peace Fund, in order to finance the peace and security operations of the Union, through the provision of USD65 million by each of the continent’s five regions per year through the import levy, increasing to USD80 million per region by the year 2020.
This is in fulfillment of the commitment by the Heads of State and Government, made in 2015, to finance 25 percent of the cost of African Union peace support operations.