Nearly N$6bn needed for roads
Some of the roads being rehabilitated include the 78 km Rundu-Divindu stretch as well as the Karibib-Omaruru road.
For next year’s budget, the Road Fund Administration (RFA) has received funding requests totalling N$7 billion, of which N$5.8 billion is for the national road network.CEO Ali Ipinge said this at consultations for the RFA’s 2024-2025 business plan.
The agency has increased its revenue by 16.5% - from N$3 billion in 2022 to N$3.4 billion in 2023.
He said in the current business plan, 81% of budget requests from approved authorities have been funded, reducing the RFA’s funding gap to N$800 million for the year under review.
“Over the five-year business plan period, the anticipated commitment would equate to N$20.5 billion.”
Ipinge said noteworthy in this financial year are key projects and programmes being financed such as the maintenance of the national road network, rehabilitation of the Rundu- Divindu road (78 km), rehabilitation of the Keetmanshoop-Mariental section between Tses and Gochas of 89 km and the upgrade of 144 km of gravel roads to low volume seal standards.
It will also include the rehabilitation of the Onhuno-Eenhana road (Phase 1), maintenance of roads in the Etosha National Park, rehabilitation of the Karibib-Omaruru road and rehabilitation of roads in Rundu.
Drastic proposal
“Two years ago, the RFA proposed to the finance ministry an increase of N$0.50 in the fuel levy for the 2023/2024 and 2024/2025 financial years.”
Ipinge said this drastic yet imperative proposal was to effectively address the perennial funding shortfalls to the national road network as well as urban roads.
However, during the 2022/2023 financial year, no adjustments were approved.
Meanwhile, between May and October 2022, the fuel levy was reduced by 50% from N$1.48 to N$1.047 per litre.
“This was done to provide relief to road users from the high fuel prices, rising interest and a generally higher cost of goods and services.”
Ipinge said the resultant revenue loss of about N$350 million was absorbed by the RFA from its reserve fund and funding commitments to all approved authorities.
This year, the RFA completed a study looking at appropriate charges for the adequate preservation of the country’s roads and the sustainability of the revenue instruments, he added.
There is an indication that funding requirements to maintain the current network in an acceptable condition, and to close the funding gap, would require the fuel levy to be pithed at N$2.98 per litre by 2026.
The funding gap is set to widen to N$3.6 billion in the 2024/2025 financial year, Ipinge said, putting a considerable dent in meeting the funding of the road sector.