Lusaka,11th July 2001(Reuters)

African leaders met behind closed doors yesterday to chart the future of a new pan-African body to replace the OAU after electing the man to take charge of it.

Thirty-nine leaders attending the summit held a marathon vote overnight to elect the man who will oversee the winding down of the OAU and its replacement by the African Union (AU) with a planned parliament, court of justice and central bank.

They chose former Ivorian foreign minister and seasoned diplomat Amara Essy to turn an outdated pan-African body into a modern entity during a 12-month transition period.

United Nations Secretary-General Kofi Annan commended Africa for its decision to set up the union. "The decision to transform the OAU into an African Union should be seen as an attempt to broaden the limits of the organisation," Mr Annan said.

He said he hoped the new body would address economic and social issues as well as political issues, the main remit of the OAU, established in 1963. But the 53-member, financially strapped OAU will have enormous difficulties in forging economic, political and legal ties on a continent dogged by wars and poverty, and saddled with a $334 billion debt.

Mr Annan, a Ghanaian, said African leaders must redouble efforts to resolve the crises on the continent if the grand AU plan was to bear fruit. "We need to clean up our neighbourhood, we need to pull together to make the union successful," he said. "Union implies stability, union implies a certain harmony," Mr Annan said, noting that Europe enjoyed 50 years of peace before the EU was born.

"If Africa wants to go that route, the first business is to end conflicts and crises and work together to resolve their differences through political means and dialogue," the UN chief urged.

The organisation is already looking at ways to drum up funds as fees alone will not be enough to run the AU, the brainchild of Libyan leader Muammar Gaddafi.

A special African Union tax levied on all member states is under consideration, but cynics doubted whether the measure would work. Many countries have struggled to pay their annual OAU fees. Bridging the economic divide could also become problematic.

Trade among African countries is relatively low, and the continent's numerous trading blocs - the Arab Maghreb Union (UMA), the Common Market for Eastern and Southern Africa (Comesa), the Southern African Development Community (SADC) and the Economic Community of West African States (Ecowas) - have been at odds over forging free trade agreements.

But the ideas behind the AU have nonetheless spurred new hopes of tackling the continent's myriad problems. Outgoing OAU Secretary-General Salim Ahmed Salim on Monday described the creation of the African Union as one of the "greatest achievements of this continent".

Host President Frederick Chiluba - who is also the incoming chairman of the rotating OAU presidency - said the heads of state should "come up with landmark decisions pertaining to the operationalisation of the AU".

Member states will also look to the AU to do a better job at handling civil and ethnic strife than its predecessor, whose record at conflict prevention is abysmal.

Mr Chiluba stressed the need for political cohesion "in the increasing world of globalisation, (so that) our continent speaks with a strong and united voice".

He said he had "great concern that despite our continent having reached a major turning point, the African skies remain overcast by a dark cloud of violent conflicts, and ethnic religions and other unresolved tensions as well as the spectre of unconstitutional usurpation of political power that looms menacingly around us".

The Zambian host added: "There is ... need for us to accelerate the process of democratisation and ensure we bring into the African Union common democratic values."