The Road Fund Administration (RFA) of Namibia recently announced an increase of vehicle registration fees and fuel prices. Eight cents per liter increased the cost of diesel and petrol while the annual vehicle registration fee increased by N$40 to N$60. The new charges were as a result of a 6.5 percent increase in national road user charges.
The Ministry of Finance confirmed the new charges which took effect beginning of May. RFA gave out a statement saying that it was necessary to implement the increased costs due to the increased number of vehicles and traveling distances covered on Namibian roads. RFA collects revenue through road user charge on motorists then uses the money to rehabilitate, preserve and maintain the national road network. The move to increase road use charges will help the RFA to have more revenue at its disposal.
Ali Ipinge, RFA CEO noted that the consistent annual 4 to 6 percent rise in vehicle population I the country as well as yearly distance traveled had resulted to adverse effects on roads, especially in urban areas. He also mentioned adverse climatic conditions as a significant contributor to the deterioration of roads. Mr. Ipinge acknowledged that there was a need for more funds to maintain the road network in Namibia.
The lower revenues experienced by RFA were despite the accelerated revenue collected by the Road Fund in the financial year 2017/18 at N$2.35 billion from N$2.21 billion in 2016/17. This figure is projected to rise above inflation to N$2.6 billion (11 percent) in the next financial year, 2018/19. Mr. Ipinge called on all public road users to increase their contributions to ensure sustainability of the road network. He further noted that RFA lacked N$600 million in annual revenue required to maintain road infrastructure in the country. He also pointed out that the Road Fund would likely experience slowed growth rate owing to the reduced sales of new vehicles which have affected vehicle registration and license revenues. Ipinge confirmed that the RFA would take up loans to bridge the funding gaps which would be used to rehabilitate 88 kilometers of the Mariental-Keetmanshoop Road and the phase one of the Windhoek to Okahandja Duel Carriageway Road Project.