Africa Should Self Finance.
THE decision by the African Union to start mopping up resources for the development of the continent is welcome.
Africa has what it takes to mobilise its own finances to make the continent self- sufficient.
At the on- going 27th African Union ( AU) heads of State and Government summit in Kigali, Rwanda, a financing mechanism has been adopted to enable the continental body generate funds required for its activities starting next year.
The African leaders have unequivocally resolved to generate 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 peacekeeping operations while 75 percent will be for development projects.
It is estimated that once the AU plan to provide 100 percent finances for its activities is implemented, the continental body will generate US$ 1.2 billion and will be able to meet the objective of self- financing.
This beautiful continent is endowed with massive natural resources as well as qualified manpower to take the continent where it desires to be.
That is why we welcome the resolution by the African heads of State that Africa has to change the status quo, where 76 percent of financing for the continent’s core activities was done by the donor community while 24 percent was coming from Africa.
Donor support is welcome but it is not sustainable. Support from outside sometimes comes with strings.
Therefore, the decision to start looking inwards is more than welcome because it reinforces the continent’s freedom from borrowing.
When our forefathers fought for independence, it is not only political freedom they aspired for. They had greater freedom in mind – including economic.
The current thinking by the heads of State is taking Africa towards economic freedom.
If Africa has been able to undertake peace- keeping operations internally, then generating resources for development should be an easy task, especially that our revenue authorities have over the years built enough capacity to raise substantial resources from taxes.
The success of the continent’s revenue bodies has given confidence to heads of State to start mobilising financial resources for the continent’s socio- economic development.
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.
This will be achieved by all member countries implementing a proposed levy of 0.2 percent on all eligible imports applied uniformly to relieve the burden that comes with getting funding from the donor community.
Africa can only grow from its own resources – financial and human.