By Josef Kefas Sheehama
Namibia is facing a tough situation as the Road Fund Administration (RFA) is proposing an increase in the fuel levy charged on every litre of fuel sold in the country. The goal is to meet a N$4.3 billion funding gap for road rehabilitation, upgrades, and maintenance. However, this move is expected to greatly inconvenience not only the motoring public but also the already hard-hit Namibians, especially the poor who will be affected the most.
Increasing the fuel levy has a negative impact on socio-economic deprived society as it is a regressive tax where everyone pays the same. Lower-income car users will be hit hardest by the fuel levy increase as they do not have as much disposable income as higher-income car users. Furthermore, fuel levy increases will not only affect the prices of fuels consumed by households but also the prices of other goods consumed because of the impact on the fuel inputs of these goods.
In light of the current threat to the nation’s economy, the ruling, if left unchallenged, will not only destabilize the country but also further stifle economic recovery. Inequality is not only a threat to economic and social rights it impends the advancement of all rights. This is a serious issue that needs to be addressed.
Moreover, the RFA’s anticipated increase in revenues from tollgates does not make business sense and is not economically viable. The introduction of tollgates is expected to add to the burden of the already hard-hit Namibians. Most motorists are low-income earners driving Dankie-Botswana vehicles, and this will be a tough ride for them as they will be forced to part with their few hard-earned dollars.
The RFA Annual Financial Statements for the year ended 31 March 2022 show that the RFA is generating enough revenue from us. The surplus for the year increased to N$ 172 943 404 from N$ 88,188,302. The RFA is solvent and highly liquid. The RFA Directors are remunerated an amount of N$ 723 754.22 for the year under review. This represents roughly 0.03% of revenue. However, the increase in employee costs from N$ 92 502 060 to N$ 96 019 204 in 2022, and the increase in entertainment from N$ 609 027 to N$ 782 293 (+N$ 173 266) for the year under review, are concerns that need to be addressed.
It is indeed difficult to fathom how Namibia, with a shrivelling economy that saw many people retrenched, is a country where the few who are employed earn salaries below the poverty datum line and where the majority survive in informal sectors. It is easy for the rich to pay these fees. The same applies to government officials who use government cars and so on paid for by the taxpayers. What about the poor? What about the citizens already scraping by and barely making ends meet? Pay more for diesel, pay more for food, and pay more for this and that.
The RFA needs to think deeply before making decisions. It will be in the interest of the RFA to look for other alternative methods to strengthen the economic policies of the government and return Namibia to the good old days instead of calling for high fuel levies and introducing tollgates. There is no denying the fact that it is a means of generating funds that can be used to benefit the country, but it should not be at the expense of the poor. – Namibia Daily News