WINDHOEK: The Road Fund Administration (RFA), a critical body overseeing road financing in Namibia, has expressed its concern over the Ministry of Finance’s decision to not approve a proposed increase in the fuel levy for three consecutive financial years.

According to NAMPA, speaking at the RFA annual business plan stakeholders consultative workshop on Wednesday, the administration had put forward a proposal two years ago for three consecutive 50-cent increases in the fuel levy across the 2022/23, 2023/24, and 2024/25 financial years. Ipinge underscored that this significant proposal aimed to address the consistent funding shortfall affecting the national road network as well as urban roads and streets.

However, despite these efforts, there were no adjustments made to the road user charges during the 2022/23 financial year. Contrarily, between May and October 2022, the fuel levy was decreased by 50 percent from N.dollar 1.48 to N.dollar 0.74 per litre in an attempt to alleviate the financial burden of high fuel prices on road users. The levy has since been adjusted to N.dollar 1.78 per litre, still below the inflation-adjusted benchmark of N.dollar 2.58 per litre as highlighted by Ipinge.

The RFA had to absorb a revenue loss of around N.dollar 350 million from its reserve fund due to this reduction. Ipinge emphasized the necessity of adjusting road user charges to close the funding gap, contain maintenance backlogs, and halt the rapid deterioration of both national and urban roads.

To achieve these goals and maintain the current road network, the RFA estimates that the fuel levy needs to be increased to N.dollar 2.98 per litre by 2026. During the workshop, various stakeholders, including local authorities, convened to assess the funding commitments outlined in the RFA’s five-year business plan for the period 2023-2028.

Ipinge noted that the RFA has projected a 16.5 percent increase in its revenue, from N.dollar 3 billion in 2022 to N.dollar 3.4 billion in 2023. The budget for the upcoming financial year is based on an expected revenue collection of N.dollar 3.2 billion.