RFA proposes N$4.49 fuel levy to fund gaps

The Road Fund Administration (RFA) is proposing to increase the current fuel levy by N$2.06, bringing the total levy to N$4.46.

This is to meet the fund’s current financing deficit of about N$5 billion.

RFA chief executive Ali Ipinge, speaking at the launch of the fund’s business plan for the next five years in Windhoek yesterday, said it needs N$7 billion annually, excluding local authorities requiring about N$1.3 billion.

He said although there has been a 15% increase in revenue from road user charges, the cost of road construction and maintenance has outpaced revenue.

“Key transport corridors are deteriorating, and there has been a drop from the government’s side in terms of what they usually invest in road infrastructure,” Ipinge said.

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

“If an additional N$2.06 per litre could be abstained by the RFA, the total deficit for maintenance to achieve RFA condition targets could be funded,” Ipinge said.

He said the fund is considering different ways to address the situation, and apart from raising fuel levies, it is also consulting on introducing tolling.

“The government provides only about 40% of the RFA’s funding needs and, therefore, needs road user charges to increase to meet the financing gap,” Ipinge said.

However, all these proposals are at the consultation stage, with levy proposals still requiring government approval.

Ipinge said poor roads mean a higher cost for drivers as cars are more prone to damage and maintenance.

An RFA study has found that for every N$1 not spent on improving roads, vehicle owners have to spend N$3 more to maintain their cars.

Namibia’s road network is about 49 000km, with 25 000 of that being gravel.

To replace the current road network, the RFA would need about N$221 billion, and if maintenance is delayed, it would cost the government 10 times more, Ipinge said.

Namibia is still ranked among the top African countries with good quality roads.

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