RFA wants increase in fuel levy to meet N$4.3bn funding gap

The Road Fund Administration (RFA) has called for an increase in the fuel levy charged on every litre of fuel sold in the country to meet a N$4.3 billion funding gap for road rehabilitation, upgrades, and maintenance.

RFA Chief Executive Officer Ali Ipinge said the current levy at N$1.48 on every litre of fuel was proving insufficient to meet its funding needs and had lagged behind that charged by regional peers.

“Historically over the years, annual road user charges (RUCs) adjustments have not kept pace with inflation, SADC peers, the growth of the road network, and subsequent urbanization of towns. In comparison to other SADC countries, the current fuel levy rate of N$1.48 remains insufficient,” he said during the groundbreaking ceremony for the Peter Nanyemba Road upgrade on Friday.

“When refueling, road users contribute approximately N$1.48 cents. The question then is whether this amount is sufficient or high, and the answer is that we have fallen behind SADC countries in terms of the fuel levy that accrues to the road fund for road infrastructure."

This comes after the RFA pocketed N$1.3 billion in revenue from fuel levies in the previous fiscal year, resulting in an 11% increase in revenue to N$2.4 billion.

"About 55% (N$1.3 billion out of N$2.42 billion) of our revenue is made up of the fuel levy income. However, in order to realize optimal funding (from current RATE 60% to 70%), N$4.3 billion is needed to address the backlog needs of road rehabilitation, upgrades, and maintenance of both the national road network as well as urban roads and streets,” said Ipinge.

He further attributed Namibian road deterioration to the challenging and constrained operational environment that leads to underfunding.

He said over the years, the fund has doubled its funding to local authorities to N$216 million for road upgrades.

"Over the past 2.5 years, the funding allocations to the LAs have more than doubled from N$104 to N$216 million. Such a big increase demonstrates RFA's commitment to the betterment and improvement of urban roads, having endured years of neglect," the RFA CEO said.

Fuel dealers in Namibia are currently charged a levy of 90c/litre on fuel, a Road Fund Administration levy of N$1.48/litre, a Motor Vehicle Accident Fund levy of 47c/litre, and a National Energy Fund levy of 98c/litre, a position which is blamed for driving up the pump price for motorists.

The fund is also targeting to raise over N$700 million from road tolling after having identified 23 road sections for the establishment of toll gates.

The Road Fund Administration (RFA) says it has invested more than N$30 billion in road infrastructure in the country, leading Namibia to be ranked number one in Africa and 21 in the world in terms of the quality of road infrastructure.

According to the fund, Namibia’s road network of approximately 49,000km is valued at N$101 billion, of which about 83% is unpaved.



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Last modified on Monday, 24 April 2023 19:53

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