Nigeria proposes $10 billion AU Peace Fund as foreign aid declines

Nigeria has proposed the creation of a $10 billion African Union (AU) Peace Fund over the next ten years, amid a decline in foreign aid to the bloc. The proposal was made by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, during the 27th Extraordinary Session of the AU Executive Council in Accra, Ghana.

The proposed fund would be financed through levies on member states, philanthropy, and African capital. Oyedele suggested that investments in the fund should be managed under sovereign wealth fund principles to generate sustainable returns for peace initiatives across Africa. The plan is more ambitious than the existing $1 billion target, though Nigeria is open to starting with that figure.

Oyedele emphasized the AU's funding challenges, noting that member states contribute only 25% of the organization's budget and 4% of program funding, compared to the 75% target. He highlighted the need for African countries to strengthen domestic resource mobilization and establish more sustainable funding arrangements for the continental organization.

Oyedele called for the elimination of 29 areas of duplication within the AU, estimating that this could save the organization up to $36 million. He urged the AU Commission to implement outstanding audit recommendations and look for additional revenue sources, such as income from AU-owned properties. Oyedele cautioned against spending the principal of the Peace Fund, advocating for the retention of interest-only payments until a sustainable replenishment mechanism is established.

He urged member states to fulfill their financial commitments and called for the Accra meeting to produce a concrete implementation work plan.