African Union to cost South Africa an extra R2.2bn

South Africa already pays millions towards the upkeep of the Pan African Parliament that it hosts on behalf of the AU.

It also forks out more in peacekeeping missions, undertaken in numerous hotspots in the continent, and is a generous donor to its struggling peers.

But despite this, the decision has been widely welcomed as a step in the right direction by most political observers.

The funding model, in which every member country will contribute 0.2% of its trade revenue to the AU, was announced at the just-ended summit in Kigali by Rwandan Finance Minister Claver Gatete. Observers said the model was more efficient than the current method, in which most of the funds came from foreign donor countries.

Department of Trade and Industry director-general Lionel October said on Sunday the proposal had been on the table for a while, and the new funding formula was derived from a trade model. Explaining how the AU’s revised fund-collection model would work, October said: "The funds collected, in the form of import duties and tariffs, would be paid directly to the Reserve Bank, with the South African Revenue Service serving as the collecting agent. This is a better formula, because it does not go into the overall tax base, and it is a more efficient system."

Department spokesman Clayson Monyela on Sunday did not answer repeated calls. Currently, the Department of International Relations and Co-operation funds subscriptions through its international transfers programme.

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