The Motor Vehicle Accident Fund of Namibia (MVA Fund) has started implementing cost-cutting measures and suspending some projects after a 50% reduction in fuel levies cut the institution’s monthly revenue by N$24 million.
MVA Fund Chief Executive Officer Rosalia Martins-Hausiku warned that the long-term sustainability of the Fund could come under pressure if the temporary levy reduction introduced by government continues beyond six months.
“We are basically dependent solely on the fuel levy. Due to the reduction in the fuel levy, we are doing cost management. We have had to put some projects and programmes on hold to ensure that we are able to pay claims,” Martins-Hausiku said.
The levy reduction, which took effect on 1 April 2026, was introduced as part of government measures aimed at cushioning consumers from rising fuel prices linked to geopolitical tensions in the Middle East.
According to Martins-Hausiku, the Fund’s monthly revenue has fallen from about N$48 million to N$24 million since the levy cut came into effect.
She said the institution remains financially stable in the short term but warned that prolonged reductions in levy income would begin to create operational pressure.
“If it continues, yes, especially if it goes beyond six months, we will start seeing the red flags,” Martins-Hausiku said.
The MVA Fund has built an asset base exceeding N$2 billion over the past decade following a financial turnaround strategy implemented after years of financial instability.
Martins-Hausiku said the institution previously faced severe financial challenges, including insolvency driven largely by unlimited claims under the old compensation framework.
“In 2004 we were actually insolvent with a deficit of N$543 million. In 2013, the deficit was N$361 million. Our compensatory system with unlimited claims was the major driver of that,” she said.
She said reforms introduced between 2003 and 2007 capped claims and reduced exposure to large payouts, while operational restructuring lowered legal costs and improved claims processing.
According to Martins-Hausiku, the Fund reached financial break-even for the first time in 2016 following the implementation of a turnaround strategy launched in 2011.
Since then, the institution has expanded investment into emergency medical services, rehabilitation programmes, state hospital upgrades and property development.
Martins-Hausiku said the Fund has shifted its focus away from compensation towards rehabilitation and reintegration.
“We don’t focus on compensation anymore. Our focus changed to rehabilitation, returning people to work, independence and then to school for the schoolgoing children,” she said.
The Fund has also invested in paramedic training, emergency response systems and rehabilitation support aimed at reducing long-term injury costs and improving recovery outcomes.
Operational reforms introduced by the institution have reduced claims turnaround times, with funeral claims now processed within 30 minutes once documentation is complete, while other claims are assessed within three days.
Martins-Hausiku said the MVA Fund continues to prioritise financial discipline through zero overspending targets for business units and continued investment management to protect long-term sustainability amid declining levy income.
