Namibia could lose N$5 billion annually due to high road transport costs caused by inefficiencies and poor infrastructure, according to World Bank Senior Transport Specialist Justin Runji.
He said the losses mainly stem from fuel, maintenance, repairs, tires, insurance and lost productivity, all driven by inefficiencies and poor conditions in the road sector.
Speaking at the Road Sector Policy Conference, Runji said there is an urgent need for a transformation agenda to improve efficiency and reduce financial losses.
“Our primary goal is to save our economy from significant financial losses. To put it bluntly, Namibia is losing N$5 billion annually due to vehicle operating costs—this does not even account for the costs associated with road accidents and other inefficiencies,” he said.
He further highlighted key strategies for managing the road sector more effectively. Runji advocated for the adoption of commercial management principles similar to those used in private businesses.
He called for the establishment of clear legal frameworks to ensure accountability and define responsibilities within the sector.
Runji said a dedicated road user charging system has already been implemented, including fuel levies and vehicle licences, to fund road maintenance and development.
However, the effectiveness of these charges relies heavily on the autonomy of decision-making within the Roads Contractor Company (RCC).
He said current legislation, particularly the Public Procurement Act, hampers the RCC’s competitiveness, creating delays in procurement processes that undermine operational efficiency.
“Now, about decision-making autonomy, according to Section 18 of the Road Fund Administration Act, the Road Fund can act after consultation with relevant parties. This wording is significant: while consultation is required, it does not mandate consensus. If the Road Fund applies professional judgment to establish rates for road user charges, it does not need prior approval. This distinction is crucial for understanding current dynamics,” he said.
He also criticised the RCC for lacking a foundational performance agreement, which is essential for establishing benchmarks and accountability in its operations.
This absence, he said, contributes to the RCC’s struggles in competing with the private sector, which has shown greater efficiency and innovation.
“The RCC faces difficulties in procurement due to the Public Procurement Act of 2015, which mandates that public enterprises follow government procurement procedures. This is problematic for an organisation like RCC that needs to act quickly to procure essential equipment,” he said.
Furthermore, he also highlighted the need for a shift in focus from new road developments to the preservation of existing infrastructure.
