Hiking fuel levies not a solution

The fuel levies are unfortunately intended to target motorists’ pockets, but in most cases, the poor are affected the most. The Organization of the Petroleum Exporting Countries (OPEC) is considering an oil cut of about 1.15m barrels. As such, Namibians see themselves as being caught between the devil and the deep sea. The introduction of tollgates is not economically viable.

The Road Fund Administration (RFA) has envisioned for an increase in the fuel levy charged on every litre of fuel sold in the country to meet a N$4.3 billion funding gap for road rehabilitation, upgrades, and maintenance. The Road Fund Administration (RFA) said the current levy at N$1.48 on every litre of fuel substantiating insufficient to meet its funding needs and had lagged behind that charged by regional peers. This will greatly inconvenience not only the motoring public but also workers, as this would further increase the cost of transport for the already hard-hit Namibians. If nothing changes, it will seem like a tragedy to lower-income households. 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. The 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. Increasing the fuel levy has a negative impact on socio-economic deprived society as it is a regressive tax where everyone pays the same.

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. The fuel pump prices had an effect on the cost of living, as fuel drives the prosperity of the economy for any nation and should therefore be readily available and at affordable prices. With the Russia-Ukraine conflict and OPEC considering reducing production, this will negatively impact the price of crude oil globally, this has had a direct impact on fuel prices in Namibia. The plan to increase fuel levy is not a solution. Additionally, the Road Fund Administration (RFA) anticipated increase in revenues from tollgates. This will translate to between N$500 million to N$750 million per annum, just by tolling 23 sections road network. This does not make business sense and it is not economically viable. This comes amid concerns from a cross-section of the public about the impact of rising fuel costs and other economic variables impact on our pockets.

Figures

Moreover, the RFA Annual Financial Statements for the year ended 31 March 2022 show an increase in revenue to N$2.4 billion of which RFA pocketed N$1.3 billion in revenue collected from fuel levies. The Directors are remunerated an amount of N$ 723 754.22 for the year under review. This represents roughly 0.03% of revenue. The employee costs increase from N$ 92 502 060 to N$ 96 019 204 in 2022. This means the employee’s costs increased by 3.67% whilst the entertainment increased from N$ 609 027 to N$ 782 293 ( N$ 173 266) for the year under review. This means employee costs per month is amounting to N$ 8 001 600.33 and entrainment N$ 65 191.08. The RFA surplus for the year increased to N$ 172 943 404 from N$ 88,188,302 ( N$ 84 755 102). The Net cash from operating activities increased to N$ 637 798 182. The SOE total assets increase to N$ 1 998 454 237 from N$ 1 819 879 321 as at 31 March 2022 to deliver total equity of N$ 611 856 753 from N$ 438 913 349 for the year under review. RFA is solvent and highly liquid. The RFA is generating enough from us.

Furthermore, 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. I believe it will be a good initiative after our economy has stabilized. The RFA is not helping us at all but wants us to get even poorer. We are taxed every month, imagine now we have to pay high fuel levies and toll gates. It’s so aggravating to realize that the RFA does not put into consideration how these escalating fees will affect us and make us miserable, people have cars to pay, mortgages to pay, and school fees to pay.

Economy

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.

I think it is better for RFA 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 maintain those roads and equally raise the government’s revenue. However, we should know that these times are extremely hard and there is a limit to which people can be pushed to spend non-existent money. Therefore, the plan to increase fuel levies and build tollgates is ill-timed and anti-masses. Let the rich stop pushing the poor because the poor are near the wall. Hence, increase in fuel levies and tollgates are generally imposed for the purpose of raising additional net revenue. Taxing people to death can never be the right way to shore up our depleting earnings as a nation.

At this end, you can’t give what you don’t have. This is not the time for collecting high fuel levies and building tolls; the economy is not doing well and there is a limit to which people can be pushed to spend non-existent money.

Therefore, The RFA should target foreign trucks and let the status quo for Namibian vehicles continue. I do not support the proposal.