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The African Union’s illusory quest for financial independence by Asanji Burnley and Chofor Che, published at Africanliberty.org , 15 February 2015


In an op-ed by Gulfnews.com dated the 1 of February 2015, African leaders teamed up in Addis Ababa the capital of Ethiopia in a bid to seek for solutions for an independent African Union (AU). After a two-day summit which took place at the AU’s headquarters ironically built by the Chinese, African leaders proposed new taxes on hotel stays and airline tickets in a bid to finance the AU. Analysts estimate that this move would raise about $730 million dollars a year. AU officials are also optimistic that an additional half-a-cent tax on SMS exchanges would bring in $1.6 billion. They are hoping to see the AU finance its projects and operations to the tune of 65 per cent by 2016. The AU has for long now depended on financial assistance from the West to accomplish missions on the continent, reason why this international body has been faced with a lot of criticisms. Though it is imperative for the AU to be financially independent, one begins to wonder if the right move to financial independence is by imposing heavy taxes on improvised African citizens.

Gulfnews.com opines that the AU was once seriously financed by assassinated Libyan leader Muammar Gaddafi, who was bent in making this institution an opponent to Western dominance. Presently, the AU which is made up of 54 member states gets only 28 per cent of its half-billion dollar operational budget from these members. 72 per cent of the AU’s operational budget is obtained from international donors especially from the European Union (EU), the World Bank, China, Turkey and the United States of America (USA).

Zimbabwean President, Robert Mugabe, notorious for his ‘tug of war’ with the West, and who is currently the AU’s chair observed that “Over 70 per cent of our budget is foreign funded. This is not sustainable,” This position was corroborated by Kenyan President Uhuru Kenyatta, who has also been involved in a brawl with the West after being charged by the International Criminal Court (ICC) for crimes against humanity. President Uhuru Kenyatta added that dependence on foreign financing was a “profound handicap and an impediment to the continent’s momentum”. According to Kenyan President, it is time for Africa to affirm “its independence and sovereignty more robustly”.

AU analysts argue that a financially viable AU would make this institution administratively and financially dependent. Major donors like Egypt and Libya would not have to chip in huge amounts of money for the running of AU projects and operations. Pan-African Youth Union (PYU) leader adds that the AU would thus be in a better position to make strategic and speedy decisions. He adds that “In case of emergencies like Ebola, we need to have the means to intervene quickly and without having to wait for foreign money. Money from donors always comes with strings attached.”

It is thus a laudable idea for African leaders to make the AU financially independent, but the truth is that such a plan remains an illusion for several reasons. Although African leaders have agreed to this ambitious plan, deducting these taxes is not a matter of right but voluntary. What most member states would do is to impose heavy taxes on visitors and citizens. Besides this worry not all member states will adhere to this new measure. For several years now several African states have not been able to furnish financial nor material support to the running and functioning of the AU reason why this institution has shamefully depended on foreign assistance.
Member states must seek for a holistic approach to making the AU financially viable. Charity begins at home so African states must speed up their industrialization process and infrastructure development to attract more businesses and thus more money. The private sector needs to be revamped in all African states which may would also reduce unemployment and boost African economies speedily. African states cannot continue to neglect the agricultural sector and focus more on the mineral sectors.

African governments have to also stop illicit financial flows which is really crippling African economies, despite the much talked about African renaissance. The money the continent loses can indeed make the AU financially independent rather than relying on foreign assistance and taxes.

Asanji Burnley is a Cameroonian diplomat by training and Masters Graduate from the International Relations Institute of Cameroon (IRIC). He is also co-founder of the Cameroon based Central African Centre for Libertarian Thought and Action (CACLiTA). In 2015 he was unanimously voted as President of this newly created think tank which advocates for limited government and free markets particularly in the central African region.

 
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Posted by on February 17, 2015 in Africa Development, African Union

 

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More action needed towards true liberalisation of the electricity sector in Cameroon, by Chofor Che, 14 May 2014


Cameroon has been hit by serious power outages for a decade now. The rural areas in the country have suffered most from these serious power outages. The situation is worse even in the capital city Yaoundé. According to the lone public electricity provider, AES Sonel, which has for a long time enjoyed monopoly within the electricity sector, the power outages have been as a result of maintenance operations being conducted on the country’s electrical network. According to Cameroon Report dated 12 May 2015, this is indeed paradoxical for a state which is ranked as the second country in sub Saharan Africa with a great potential in producing hydroelectricity. It is indeed amazing to know that Cameroonian legislation has evolved towards the direction of liberalisation. Cameroon Journal reveals that in 2010, Parliament enacted a law liberalising the electricity supply sector. But since the enactment of the law, the situation has become worse. Does it only suffice to enact laws without any concrete action while a majority of the population and business continue to suffer because of lack of adequate electricity supply?

It is obvious that for over a decade of increasing state control, Cameroon has had an industry that has served vested interests rather than the consumer’s interest. Despite the power shortages, electricity prices in Cameroon before taxes are higher than the average of other states on the continent. Electricity could be around 50 percent more cheaper without government interventions.

State authorities recently revealed that it was high time to get small and medium sizes (SMEs) involved in the electricity sector in Cameroon. According to Cameroon Report, of a population of 23 million inhabitants, only 850 000 are connected to the national electricity grid, thus a coverage of just 6 to 7 per cent of the national territory.

Cameroonians wonder whether the precarious electricity quagmire would one day change for the better especially as the state has been long involved in projects like the Lom Panger dam project and the hydroelectric projects of Memve’ele and Mekin, to no avail. Jean Pierre Kedi, Director General of the Electricity Regulations Agency (l’Agence de régulation du secteur de l’électricité) opines that Cameroon can solve this precarious electricity deficiency if SMEs are indeed involved in the sector. Cameroon Report adds that the Cameroonian government has partnered with the European Union and consultants such as InvestElec to make sure that SMEs get involved in alternative sources of electricity supply especially renewable energy. Workshops were even organised in Yaoundé from the 7 to the 11 of April 2014, to train actors of SMEs interested in getting firsthand knowledge on how to get involved in investment opportunities in the electricity supply sector.

African libertarians like Adedayo Thomas and Oyenuga argue that it is necessary for central governments to devolve decision making in the area of electricity supply to other stakeholders. Liberalisation in the electricity sector will thus bring in more stakeholders and trigger competition for better services.

It is thus a laudable idea to rethink the electricity supply strategy of the state. It is obvious that the European Union and InvestElec are going to pump in a lot of money to alleviate the situation. If there is no strict control of corrupt practices of state agents called upon to supervise the usage of these funds to usher in SMEs into electricity management, then the operation will be a waste of time and poor Cameroonians will continue to remain in darkness. Workshops such as that organised from the 7 to the 11 of April 2014 in Yaoundé will have no impact. There is need for the state to thus liberalise the electricity sector and give the opportunity equally for foreign companies to invest in solar energy and biomass energy especially in the rural areas. Only such measures will better the situation of Cameroonians as well as foreign investors who need electricity to alleviate poverty and move the state towards an emerging economy.

 
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Posted by on May 14, 2014 in Africa Development

 

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