SA taxpayers to pay millions more to AU
SMS and other levies proposed to swell body’s coffers
SOUTH African taxpayers will soon be forking out a massive R700-million a year for the upkeep of the AU.
This is at a time when citizens are struggling with rapidly deteriorating infrastructure, the Eskom debacle and other urgent demands on the country’s bank account.
The AU heads of state gathering currently taking place in Sandton is expected to adopt a new funding formula in terms of which South Africa’s contribution to the continental body almost quadruples, from $17-million to $64-million — about R700-million — per annum.
“It’s going to be a big jump. Where are we going to get so much money? It’s money we don’t have,” said a South African diplomat who asked not to be named.
Finance Minister Nhlanhla Nene is under pressure to cut back on government spending and has, in the past, warned that the country was running short of money to fulfil all of its domestic service delivery obligations.
The hefty AU bill would add to other foreign payments taxpayers have already bankrolled. These include:
R2-billion in unbudgeted expenditure South Africa could have to cough up by the end of the year for the long-awaited Brics New Development Bank. This contribution could balloon to R24-billion over the next seven years; ý R1.4-billion on peace missions; ý R268-million given in aid to 19 African countries, as well as Cuba, from the African Renaissance and International Co-operation Fund in 2012;
R1.1-billion in trade debt written off for Cuba in 2010;
R123-million for this year’s contribution to the UN; and
Aid worth $93-million given to Zimbabwe between 2005 and 2011.
The AU summit, which draws to an end tomorrow, is also expected to endorse a controversial proposal by former Nigerian president Olusegun Obasanjo to have countries who cannot afford to make contributions to the body via their national fiscus do so through the imposition of new hotel, airfare and SMS levies.
The AU’s Permanent Representative Council, which is made up of ambassadors, proposed to a meeting of continental foreign affairs ministers during the week that the proposals be forwarded to the summit this weekend for adoption.
AU funding became a topical issue ahead of the summit, with many of the continent’s leaders saying it was time the body “weaned itself from dependency on external partners to fund its budget”.
Currently, about 72% of AU projects are funded by foreign donors —
AU member states are not paying their contributions. Why must we foot the bill, and what do we get in return?
mostly Western governments — and heads of state say they want the AU to be 100% self-funding by 2021.
Kenyan President Uhuru Kenyatta, before leaving his country for Johannesburg on Friday, tweeted: “The future of our continent cannot be left to the good graces of outside interests. Dependency on giving that only appears charitable must end.
“Foreign aid, which so often [carries] terms and conditions that preclude progress, is not an acceptable basis for prosperity and freedom. It is time to give it up.”
According to the formula being looked at, South Africa, Algeria, Nigeria, Libya, Angola and Egypt will continue to cover 60% of the contribution by all member states to the increased budget.
South African diplomats who attended the foreign ministers’ meeting said the increased budget means that the country will now have to pay R700-million a year and that this is likely to increase even further in subsequent years.
Asked to comment on the AU fund- ing proposal yesterday, Nene said: “For now I can’t comment. The minister of international relations is attending to the matter at the AU.
“She will inform us when the proposal has been tabled and whether it has been accepted and how it is going to be implemented.”
International Relations Minister Maite Nkoana-Mashabane played down the increase, saying South Africa was not the only country being asked to pay more.
“South Africa is in the same category as five other countries on the continent whose GDP is more that 4% of the average GDP of the continent. We contribute through an assessed contribution — through a scale of assessment, country by country.
“What is important is not the figure but how we get to that figure,” Nkoana-Mashabane said.
But DA MP Sandy Kalyan, who also represents the party in the Pan African Parliament, rejected the proposed increased budget.
“South Africa has clearly assumed too much responsibility for the AU already, perhaps as payback for Nkosazana Dlamini-Zuma’s [chairmanship of the AU Commission].
“The reality is that AU member states are not paying their contributions. Why must we foot the bill, and what do we get in return?” Kalyan asked.
“R700-million is too much. The AU budget isn’t even an open book. Where is it all going?”
She also rejected Obasanjo’s alternative funding model. It proposes a $10 levy “on tickets for international flights originating in or out of Africa”; a $2 hospitality levy for the hotel industry and a $0.005 SMS tax for cellphone users.
She said it was unacceptable that cellphone users could have to cough up for an AU budget.
“Clearly, our Treasury does not have the money, but our cellphone charges are already among the highest in the world, and now they want to add to it. It is unacceptable,” Kalyan said.
The controversy over the AU’s funding arises at a time when South Africans are already paying for other multilateral international bodies and projects that the country participates in.
The Pan African Parliament, which is situated in Midrand, costs the country at least $10-million a year in accommodation and other expenses for the continental MPs.
Early this year, President Jacob Zuma committed R1.4-billion to peacekeeping efforts in the Democratic Republic of Congo, Sudan and the Mozambican channel.