The African Union Commission programes and peace missions will be funded by the 54 member countries, Rwandese Finance Minister Claver Gatete has said.
Gatete said on Sunday that the Heads of States approved a levy on all eligible goods at a rate of 0.2 percent.
This will avail the AU, $1.2 billion dollars per year that will replace almost 70 percent of external donor funding, Gatete said on the sidelines of the ongoing AU Summit in Kigali, Rwanda.
He said that the earmarked collection of 1.2 billion U.S. dollars surpasses the previous budget of 427 million that was allocated for 2015/2016.
He disclosed that the amount will be collected by the national government revenue authorities and will be deposited in an account that will be opened in all central banks in the continent.
He said that the amount will fund 75 percent of the programs and 25 percent of peace missions in the continent.
Gatete added that under the new mechanism, each sub-region is expected to raise 65 million U.S. dollars from the arrangement that will amount to 320 million, an amount that will be used in peace missions.
“For the first time, the long awaited plan to sustainably fund AU activities 100 percent has become a reality,” Gatete added.
He said that the mechanism has been in discussion for over 15 years following a revelation that some countries default to pay or delay their monthly fee hence forcing the continent body administrators to ask for foreign funding.
He said that the formula has been working in the Economic Community of West Africa States.