Fuel levy hike to raise N$400 million, more needed – RFA

The Road Fund Administration (RFA) says the recent 20-cent fuel levy increase will generate approximately N$400 million, an amount far short of the N$3.8 billion required to address Namibia’s road infrastructure funding shortfall.

RFA chief executive Ali Ipinge notes that the fund requested a N$1 per litre increase for the 2025/2026 financial year but only secured 45 cents, including the latest 20-cent adjustment.

“One dollar is ideal in terms of our estimation and calculation.

That would have significantly reduced the funding gap that we are experiencing in terms of the road projects,” Ipinge says.

The Ministry of Mines and Energy increased the RFA levy by 20 cents per litre, bringing it to N$2.43 per litre.

This marks the second hike for 2025 and contributes to the overall increase in fuel prices set for March.

“The total increase in the RFA levy is only 45% of the optimal annual road user charge funding needs, thus balancing between protecting the consumer and supporting the much-needed maintenance and preservation of the national road network,” the ministry says.

Ipinge cautions that without the full increase, crucial road maintenance and development projects could face funding shortfalls or delays.

To address the funding gap, the RFA is also exploring alternative revenue streams, including the implementation of tolling. However, Ipinge notes that this remains in the consultation phase, with government approvals still pending.

“Before we go to the areas where the toll plaza might be erected, we have to go through the due process of having the tolling strategy approved. This includes government structures and the necessary gazette before we move to the final implementation stage, which is construction and commencement of tolling,” he explains.

Beyond fuel levies and tolling, the RFA is engaging with the Ministry of Works and Transport to explore adjustments to other road user charges to bolster revenue.

“We have made a case to align with our shareholder ministry to revise some of these charges to see how far we can go in addressing the funding gap,” Ipinge says.

The chief executive emphasises that while implementing tolling and levy increases may take time, the RFA remains committed to securing adequate funding for Namibia’s road infrastructure needs.

The organisation is also engaging stakeholders to find sustainable funding solutions.

The RFA has identified a growing road infrastructure funding gap, which stood at approximately N$3 billion in 2023 and has now increased to N$3.8 billion.

A recent RFA study indicates that the fuel levy must reach N$2.98 per litre by 2026 to ensure sufficient road maintenance across Namibia.

As part of its upcoming five-year strategic plan, the RFA is set to propose a comprehensive overhaul of the country’s 49 000-kilometre road funding system to address the challenges of maintaining the national road network.

In addition to the levy increase, the Ministry of Mines and Energy has also approved a 30-cent per litre increase in the dealer’s margin for fuel retail operators, raising it to N$2.22 per litre.

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