WINDHOEK – Ordinary vehicle owners will now have to fork out an additional amount of between N$40 and N$60 in annual vehicle registration fees and an additional eight cents per litre when refuelling with either petrol or diesel, thanks to the 6.5 percent increase in national road user charges.
The Road Fund Administration (RFA) yesterday confirmed that the increase is effective as of May 1, as has just been approved by the Ministry of Finance. RFA said the increase in the number of vehicles and the distances vehicles are now travelling on Namibian roads have made it necessary to implement an increase so that the fund would have sufficient money at its disposal.
The RFA charges road user charges on motorists and uses the money to maintain, preserve and rehabilitate the national road network, which has the reputation of being one of the best road networks in Africa.
“The consistent annual growth of between 4 to 6 percent in vehicle population as well as total annual distance travelled on the Namibian road network, coupled with adverse climatic conditions, have resulted in traffic-induced deterioration and natural depreciation of our national and urban roads; hence the increased need for more funding to maintain this national asset – our roads,” said RFA CEO, Ali Ipinge, yesterday when announcing the increase.
The RFA manages the Road Fund into which the road user charges accrue. These funds are allocated to projects and programs to maintain and preserve the national road network as well as urban roads and streets. This is achieved through funding allocation to approved authorities, chief among these being the Roads Authority, local authorities and traffic law enforcement.
Total revenue raised by the Road Fund through the road user charges accelerated from N$2.21 billion in 2016/17 to N$2.35 billion in 2017/18. This figure is projected to increase above inflation at 11 percent to N$2.6 billion in the 2018/19 financial year.
“To ensure a sustainable road sector, which is key contributor to the national GDP, we have to call on our road users for an increased contribution through the road user charging system for own benefit,” said Ipinge.
He noted however that the country is facing a funding gap in excess of N$600 million per annum in terms of what is required to optimally maintain the country’s roads and streets. “In an effort to maintain a good balance between the ever-increasing road infrastructure expenditure and revenue collections from road user charges, the need to secure annual inflationary adjustments on the road user charges remains ever important,” Ipinge noted.
He added that although the RFA received an inflationary adjustment during the 2017/18 financial year, the Road Fund continues to experience slower growth due to declines in the sales of new vehicles which have impacted on the vehicle licence and registration fee income.
In addition, the reduction in national economic activities over the past two years or so had a knock-on effect on all major economic sectors, which has led to a reduction in the consumption of fuel in the economy and thus a reduced contribution of fuel levy income to RFA revenue.
“The RFA anticipates this trend to continue into the foreseeable future, therefore making the tariff increments important in sustaining our existing strategy to close the funding gap,” Ipinge explained.
Also, the RFA has committed to undertaking loans to bridge the funding gap. These include two loans from German Development Bank, KfW, of N$447 million (used for phase one of the Windhoek to Okahandja Duel Carriageway Road Project) and N$482 million (to be used for the rehabilitation of 88 km of the Mariental to Keetmanshoop road).