African Union sustainable funding strategy gains momentum

At the Extraordinary Summit of the AU held in Niamey, Niger July 2019, the Executive Council adopted the AU budget for the year 2020 at US$647.3 million. Following reforms initiated in the programme planning and budgeting process, the 2020 budget reflects a significant reduction of over US$30 million, compared to the 2019 budget.
The budget reduction further demonstrates an enhanced process of domestic resource mobilisation and stringent measures applied such as the decisive actions taken to address issues of low execution of AU projects and activities; identifying undetected wastages and instances of over-budgeting by departments or organs; as well as ensuring full compliance with the AU financial rules and regulations to ensure the prudent use of these resources to meet the development needs of the continent. The budget also reflects a commitment to strengthen a results-based budget, which enables the AU to improve the credibility of its budget, strengthen financial management capacity and accountability and demonstrate value for money and results to its Member States.

Breakdown of the AU 2020 budget

• US$157.2 million to finance operational budget of the Union
• US$216.9 million will go into the program budget
• US$273.1 million will finance peace support operations

Peace support operations will be funded by member states and international partners. Of the total budget, 38% is to be assessed on Member States while 61% will be from partners. The operating budget will be fully funded by Member States while the programme budget will be funded 41% by Member States and 59% solicited from international partners. The programme budget will support the consolidation of the implementation of key Agenda 2063 flagship projects including infrastructure development, driving the regional integration agenda peace and security, education and skills development, energy, health as well as promoting gender equality.

The AU budget process
The AU budget preparations entail joint sittings of the AU Commission and organs, the Committee of Finance Ministers (F15) technical experts and the Permanent Representatives’ Committee’s sub-Committees of General Supervision and Coordination on Budget, Finance and Administrative matters and that of Programs and Conferences at the AU Headquarters to analyze the budget of each spending unit. These joint sittings are also held at the ministerial level by the Committee of Ministers of Finance (F15) before the budget is presented to the Executive Council and the Assembly for adoption. In February 2019, the Assembly however delegated the function of the adoption of the AU budget to the Executive Council during the mid-year African Union- Regional Economic Communities coordination meeting. 
In implementing the decision on financing of the Union, the AU is implementing its 9 golden rules, which are financial management guidelines introduced by the Committee of Finance Ministers (F15), tasked with overseeing the financial and budgetary reforms.
In November 2018, the AU strengthened its sanctions regime to ensure its 55 member states meet their financial obligations to the Union in time. The new sanctions regime stipulates the short and long term measures member states will face for defaulting to pay partly or in full, their assessed contributions, within a period of six months to two years. The categories of the sanctions are; cautionary, intermediate and comprehensive. 

. Also read - African Union strengthens its sanction regime for non-payment of dues.