Nigeria has put forward a proposal to establish a $10 billion African Union (AU) Peace Fund over the next decade, a move intended to strengthen the continental body's financial independence and reduce its dependence on external funding.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, presented the proposal at the 27th Extraordinary Session of the AU Executive Council on Financing the Union in Accra, Ghana, according to a statement from the Ministry of Finance.
Oyedele said the proposed fund should be financed through levies on member states, philanthropy and African capital, with its investments managed along sovereign wealth fund principles to generate sustainable returns for peace initiatives across the continent.
The $10 billion proposal is more ambitious than the existing $1 billion target being considered for the Peace Fund, although Nigeria expressed openness to the initial target.
The minister drew attention to the AU's funding challenges, noting that member states currently finance only 25% of the organisation's budget and contribute just 4% of programme funding, compared with a target of 75%. He said declining development assistance makes it increasingly urgent for African countries to strengthen domestic resource mobilisation and establish more sustainable funding arrangements for the continental organisation.
Nigeria supports the proposed AU financing option but insists that its implementation be guided by three principles:
- Fiscal discipline: focus on fewer, high-impact priorities, supported by a credible medium-term fiscal framework and performance-linked spending ceilings. - Institutional efficiency: eliminate 29 identified areas of duplication, implement outstanding audit recommendations, and explore additional revenue sources including income from AU-owned properties. - Financial leverage: validate projections that could increase member states' contributions to $779 million by 2031, almost four times the current ceiling.
Oyedele said the projections must be carefully assessed against the fiscal constraints facing countries across the continent.
