Financial independence nigh

One of the issues the forthcoming 25th Ordinary Assembly of African Union (AU) Heads of State and Government in Johannesburg, South Africa will discuss is the development agenda of the continent and the long cherished dream for the continent to be financially independent and self-sufficient. 

For decades Africa has relied on donor funds to bankroll its social and economic programmes and in some cases even political programmes. Some African countries depend entirely on donors to bankroll their national budgets. This has left them at the mercy of donors whose financial aid comes with strings attached or prescribed policies, which are at variance with the continent’s needs.

But African leaders are showing resolute determination to move the continent away from donor handouts so that it can be able to stand on its own. 

The reading is that the continent is getting fed up with being dictated to all the time in ways some African leaders have described as degrading hence the desire to be self -reliant.

Tanzanian President Jakaya Kikwete was recently quoted as saying “Western donors were setting degrading conditions for aid” and that his government could be forced to tell them “to keep their aid”. 

It is said that African governments receive about US$50 billion in international aid assistance annually but the money comes at a cost because the same African countries have to pay back in the region of US$20 billion in debt repayments every year. 

This is what explains the stance of President Kikwete in declaring that the Tanzanian government will wean itself from this dependence in the 2016 budget.

He is not alone in this predicament because even countries that are able to fund their own programmes have to contend with arm twisting tactics of the Western donors because the donors fund continental bodies such as the Africa Union to which they are members.

It is estimated more than 70 percent of the AU’s budget comes from international partners, who include the United States and European Union. 

This is the reason why African leaders at their summit in January at the AU headquarters in Addis Ababa, Ethiopia resolved to put in place measures to ensure the AU is self-sufficient. 

A raft of taxes were proposed which are hoped to raise about US$600 million a year and countries have been working on the implementation of the tax measures. 

If implemented the measures are expected to see the African Union fund the bulk of its programmes without leaning on donors for assistance.

It is encouraging that African leaders are showing commitment to this cause and with determination the aspiration to be self-sufficient will be realised in the end. 

At the January summit, AU chairperson President Robert Mugabe of Zimbabwe said the current financial position of the AU was far from pleasing. “Over 70 percent of our budget is foreign funded. 

This is not sustainable,” he said. Kenyan President Uhuru Kenyatta also said the dependence on foreign funding was a “profound handicap and an impediment to the continent’s momentum”.

June 2015
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