Africa’s private sector boosts AU Peace Fund

As private sector donations increase, the 21 African countries still not contributing to the fund must pay up.

Published on 31 January 2025 in ISS Today

By

Moussa Soumahoro
Researcher, Africa Peace and Security Governance, ISS Addis Ababa

The African Union (AU) Peace Fund (PF) is at the heart of Africa’s quest for sustainable financial autonomy and ownership of its peacemaking initiatives. The fund is the financial backbone of the continent’s peace and security efforts, which include conflict mediation and preventive diplomacy, peace support operations, and institutional capacity building.

But progress in getting the fund up and running has been slow. After its establishment in 1993, the fund lay dormant until 2018, when it was revitalised. The pace has picked up in the past five years, with the AU addressing some of the fund’s underlying challenges, starting with setting up a robust governance structure (Chart 1).

The fund’s leadership includes a high representative – who takes care of political liaison with member states – and an executive management committee, with day-to-day operations undertaken by a secretariat in liaison with an independent fund manager. Oversight is provided by a board of trustees and an independent evaluation group.

Chart 1: AU Peace Fund governance structure Source: AU Peace Fund secretariat

Agreement has also been reached on spending modalities, giving the fund clear direction on monitoring expenses and pitching for private sector contributions. Substantial strides have been made to raise cash for the fund.

By mid-2024, the secretariat’s decade-long fundraising efforts had secured US$398 million – 98% of which came from AU member states and the remaining 2% from private contributions. Only 34 of the AU’s 55 member states have contributed, however.

Article 21 of the Peace and Security Council (PSC) Protocol establishing the fund enables contributions not only from AU members but also from the private sector and individuals.

So in July 2024, the secretariat announced new ‘innovative mechanisms for financing peace’ on the sidelines of the AU-regional economic community coordination meeting in Accra, Ghana. The goal to meet the initial US$400 million target and raise further finance from Africa’s private sector and citizens was achieved, with private contributions jumping to 36% of the total (Chart 2).

The African Export-Import Bank (Afreximbank) has pledged US$210 million over three years, with Standard Bank Group and Ethiopian Airlines each donating US$1 million. Afreximbank’s contribution includes grants, technical assistance, a project preparation facility and seed capital. Private sector pledges at the Accra meeting pushed the fund’s resources to an estimated US$610 million.

Chart 2: Member state funding vs private contribution Source: AU Peace Fund secretariat

These substantial contributions are an important boost for Africa’s stabilisation efforts. They will help the AU cover the 25% contribution required by the United Nations (UN) Security Council for joint UN-AU peace support operations, and help deliver African solutions to African problems.

Increased private donations are also a significant step towards achieving the citizen-driven entity envisaged at the AU’s inception, with states and citizens tackling security challenges together. AU Political Affairs, Peace and Security Department sources say the trend sparked in Accra has increased the private sector’s appetite for further contributions, and the Peace Fund secretariat is working to secure more public donations.

But these encouraging gains still lag behind the immense cost of dealing with Africa’s conflicts. For example, the annual cost of the AU Transition Mission in Somalia was estimated at US$1.5 billion in 2023. Its replacement, the AU Support and Stabilisation Mission in Somalia, was recently approved by the UN Security Council.

After the Accra meeting, private sector contributions jumped from 2% to 36% of the fund’s total

If the two missions’ costs are the same, the AU will need to contribute US$375 million – which is 61.5% of the Peace Fund’s total current budget. The fund’s remaining US$235 million will barely cover other missions, like the Multinational Joint Task Force in the Lake Chad Basin, let alone conflict prevention activities such as preventive diplomacy.

The AU appreciates the enormity of the task. Speaking at the Accra fundraising event, the Peace Fund’s High Representative Donald Kaberuka said: ‘Africa needs more resources than what we have collected today, as we have a very long way to go. I encourage member states and the private sector to contribute more.’

Given the scale of Africa’s security challenges, the AU must build on the momentum achieved in Accra to secure further contributions from the continent’s numerous profitable enterprises.

African philanthropists and the public could also contribute. Securing their support would require increased bilateral engagements and a sustained communication strategy that builds on the good work of the secretariat so far, despite its limited capacity.

A critical milestone would be getting African countries to agree on the Peace Fund’s assessment scales

However, the secretariat needs additional communication expertise to increase its reach, monitor and evaluate its progress and challenges, and better target its actions. Greater use of digital platforms to market the benefit of contributions and robust crowdfunding approaches could also help.

As the continent grapples with post-coup transitions, high-intensity armed conflicts in the Democratic Republic of the Congo and Sudan, and violent extremism, Africa must further develop its financial muscle.

A critical milestone would be getting African countries to agree on AU Assembly Decision 734. The decision deals with the Peace Fund’s assessment scales, which aim to equitably share the financial burden among member states. It suggests that contributions are made individually according to ‘principles of solidarity, equitable payments and capacity to pay in a way that ensures no single country bears a disproportionate share of the budget.’

Although most AU member states welcomed Decision 734, which amends the previous approach based on regional contributions, North Africa – especially Egypt and Tunisia – objected. These kinds of divisions impede the harmonised and timely collection of funds.

While private sector donations and the shrewd investment of current funds remain pivotal, the primary responsibility for financing Africa’s peace and security lies with AU member states. Given that 21 countries still aren’t contributing, advocacy for sustainable financing must target both heads of state and the private sector with the same intensity.

This article was first published by the ISS’ PSC Report.


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