High Level Meeting on Financing the African Union. “Beyond COVID-19 pandemic and Russia- Ukraine Conflict: Enhancing the Resilience of African Economies and Financial Sustainability of the African Union”.

Event

lun, 13 Jun 2022 - 09:00 - mar, 14 Jun 2022 - 17:00

Budget and financial reforms are an essential part of achieving the African Union Agenda 2063, and lie at the heart of the ongoing institution-wide reforms at the African Union. The Budget and financial reforms reflect a concerted effort by member states to ensure that AU is financed in a sustainable, predictable and accountable manner.

About financing of the African Union.

The African Union needs adequate, reliable and predictable resources to implement its programmes so as to achieve its development and integration goals. Successive Summits of the AU have since 2015, taken financial reform decisions, to ensure there is sound and predictable finances to address the historical challenges the African Union has faced. These are;

Unpredictability and volatility of its revenues;
Dependence on external partners;
Reliance on a few Member States;
The need to demonstrate the value for money and probity, and
The growing budget.

The Kigali Decision on Financing of the Union adopted the implementation of the 0.2 percent import levy in July 2016. As of the 16th of December 2020, there were 17 countries, representing about 31% of AU membership, at various stages of domesticating the Kigali Decision on Financing the Union.

Read the Status Report on “Towards the Financial Autonomy of the African Union.”

The adopted financial reform decisions are intended to achieve the following key objectives:

Timely, adequate, reliable and predictable payment of all Member State assessed contributions and Partner contributions to the African Union.
Financial autonomy and reduced dependence on external sources.
Equitable burden-sharing of the Union’s budget and reduced dependence on a few countries.
Improved budget, financial oversight and governance to achieve high fiduciary standards, value for money and probity.
Predictable and sustainable financing of the AU’s peace operations through the revitalization of the AU Peace Fund and the pursuit of strategic partnerships.

About the High Level Meeting on Financing the African Union.

Budget and financial reforms are an essential part of achieving the African Union (AU)’s Agenda 2063 and lie at the heart of the on-going institution-wide reforms at the organization. They represent a concerted effort by member states to ensure that African Union is financed in a sustainable, predictable and accountable manner.

Equally important and to respond to a call by Member States for transparent, accountable and prudent management of resources. the Assembly has since established the Committee of Fifteen Ministers of Finance (F15). The mandate of F15 has been expanded over time, and currently covers five areas as follows:

Participate in the preparation of the annual budget of the African Union.
Assume responsibility for oversight of the African Union budget and Reserve Fund;
Develop a set of golden rules establishing clear financial management and accountability principles.
Address challenges faced by Member States in implementing the 0.2% levy on imports towards financing the African Union.
Be part of the reconfigured Ministerial Committee on Scale of Assessment and Contributions.

The F15 meets atleast twice a year to take stock of the implementation of Assembly and Council Decisions on Financing the African Union. In addition, the Committee addresses specific emerging issues with respect to financial management systems and budget processes with a view to identifying appropriate strategies and remedial measures including cross-checking the general coherence and consistency of Decisions. Such emerging issues are COVID-19 and the Ukraine conflict. The combined aftershocks of the pandemic and conflict are profoundly affecting growth prospects of the African Continent, leaving Member States with little fiscal room to satisfy the needs of their population and meet their financial commitments to the Union.

The June 2022 Retreat of the Committee of Fifteen Ministers of Finance (F15) will be convened under the theme: Beyond COVID-19 pandemic and Russia- Ukraine Conflict: Enhancing the Resilience of African Economies and Financial Sustainability of the African Union”. The meeting will device innovative bounce-back strategies. A Declaration will be adopted at the end of the meeting.

The Retreat shall be a two-day event organized in an open session on Day One and a closed session on Day Two, as follows:

DAY ONE- OPEN SESSION

Post Covid-19 pandemic and Russia- Ukraine conflict: Strategies and policy considerations for Economic Recovery and resilience.

In this session, F15 Ministers will share experiences on economic recovery strategies, fiscal reforms as well as other innovative solutions that have been implemented in response to COVID-19. Ministers will also reflect on the current, emerging and future challenges facing the Continent such as the Ukraine conflict and their implications, with a view to charting a pathway to sustainable recovery and build resilient tax base.

African Union Financial Sustainability: Where Are We Now? What Are the Next Steps?

In this session, the meeting will discuss AU financial sustainability in the context of the current emerging policy issues. They will examine the financial health of the Organisation with focus on the status of implementation of the Golden Rules for financial management and accountability principles and other Decisions on Financing the Union. This session will also discuss the impact of COVID-19 and Russia- Ukraine Conflict on the capacity of Member States to honour financial obligations to the Union.

DAY TWO- CLOSED SESSION

F15 Performance: Taking Stock and Enhancing Effectiveness.

This session will take stock of how the F15 has performed over the last few years since the Committee was established in 2017 and propose improvements where necessary. More specifically, the meeting will evaluate the work of F15 in the following areas:

Participation in budgetary and oversight statutory processes
The administration of the Scale of Assessment and sanctions regime
Involvement in providing political and technical leadership in the adoption of the 0.2% levy and addressing concerns raised by Member States in implementing the same
Working methods, in particular its Draft Rules of Procedure

Consideration of the Draft Declaration

Objective and Expected Outcomes of the High Level Meeting.

The overall objective of the retreat is to provide an opportunity to the F15 to review the financial sustainability of the African Union in the context of ongoing budget and financial reforms, taking into consideration the lessons learnt for post-COVID-19 and Russia- Ukraine Conflict recovery, and propose enhancements to the Financing of the Union.

The specific objectives of the Retreat are:

To review the emerging national, continental and global policy issues, including COVID-19 and Ukraine conflict, and their implications on the financial sustainability of the African Union, and brainstorm on innovations and strategies to support national economic recovery and capabilities to sustain the financing of the Union;
To consider the status of the implementation of the Golden Rules for financial management and accountability principles;
To reflect on the work of F15 in respect of its mandate which entails participation in the budget process, oversight responsibilities, administration of Member States contributions and implementation of the 0.2% levy on imports;
To review and finalize the working methods of F15, including its rules of procedure.

The expected outcome of the Retreat will be a Declaration that will be forwarded to the February 2022 Executive Council and Summit meetings for consideration and approval. The Declaration will include the following:

Recommendations on key policy considerations for fast-tracking Africa’s economic recovery as a backbone to improving financial sustainability of the African Union;
Assessment of the extent of implementation of the current Golden Rules, their effectiveness in improving the financial health of the AU and recommendations and proposals for their revision if required.
Clarity on the interpretation of Decisions that define the mandate of the F15 including generation of ideas and recommendations on deepening coordination and collaboration with other oversight bodies, as well as the desired Secretariat support services;
Adoption of the Rules of Procedure of the F15.

Participation at the High Level Meeting.

The retreat will draw participants from the Committee of Fifteen Ministers of Finance and its Experts; the African Union Commission; the African Union Permanent Representatives’ Committee and its relevant sub committees; the AUDA-NEPAD and African Continental Free Trade Area Secretariat.

Officials from the following institutions will be invited to join the discussions and contribute insights: the AU Envoy on Financial Reforms; the African Development Bank; and UN Economic Commission for Africa.

Additionally, the Retreat shall be facilitated by external resource persons from the Collaborative Africa Budget Reform Initiative (CABRI), an intergovernmental organisation with extensive experience collaborating with the African Union Commission and African ministries of finance, budget and planning on financial management and budget reforms.

References and Resources.

For further information please contact:

Lulit Getachew Kitaw | Cabinet of the Deputy Chairperson | African Union Commission | E-mail: LulitGK@africa-union.org |Addis Ababa, Ethiopia.

Hilina Tadesse Hailemariam | F15 Secretariat and Contributions Unit | African Union Commission | E-mail: HilinaT@africa-union.org |Addis Ababa, Ethiopia.