From Where I Sit: By Boniface D. Satu, MBA, MS, BBA, BSA
The current Road Fund Amendment Bill been debated in the Lower House will capacitate the NRF to source funding, mitigate fund flow risk and allow matching funds and international financial institutions to lend money for our road infrastructure. This is not a “political football” but in the best interest of the country.
Government established the Roads Fund, Roads Fund Board and Road Agencies to improve on Road Financing and Management of Roads. Most African countries started with 1st generation meaning under control of government, today, almost all road funds are second generation 100 % autonomous less interference. In fact, Liberia was able to established the Road Fund 1st generation (government), but GOL stop short of the Road Agency which gives appetite to donors to participate in PPP, matching funds, cost recovery etc.
Today, donors are not encouraged until GOL do those things that provide sustainability, transparency and accountability in the road sector. The Amendment will address some of those issue and our international partners fully support this amendment. Currently, the World Bank has an approved project ” Road Sector Development Project” working with NRF and MPW on reforms Road Agency and autonomous road fund. Do we want our partners to do this or we can do ourselves by passing the BILL.
CHALLENGES • Appetite for donor support in the road sector has decreased especially when total REFORM has not taken place for a (Road Agency, Road Authority and 2nd generation Road Fund). To cope with the upcoming difficulties ahead for the road sector environment in Africa – Economic and financial crisis affecting donors – Less interest for some major actors (EU, GIZ, World Bank USAID etc.) hence greater interest for others sectors (energy, agriculture, railways…) – Changes in some major donors’ procedures (EU) – Raise of green energy in automobile industry. We need to watch out for fuel efficient and electric vehicles.
The world is changing by 2030 both Europe and USA will be binding fuel cars and moving to full scale electric vehicles. USA is investing over 600 million for electric vehicle charging system and reducing emissions. Norway is currently using 100% electric vehicles. Fuel tax revenue will be challenged. The world is finding alternative financing tolling is the new normal.
Due to international economic and financial crisis and the raise of green energy in automobile industry, new paradigm has to be found to increase Road Fund revenues. Therefore, most countries have move towards 100% autonomy of the Road Funds. Ghana in recent time allow all funds collected deposited into the Road Fund Account directly, not through the Ghana Consolidated or single treasury account.
Due to the dynamic action of the Ghanaian parliament and government swift action the fund is attracting potential financing institution to lend them funds. UBA has just lend them over 300million. National budget cannot do it.
ROAD FUND IN AFRICA are all autonomous (Sierra Leone, Ghana etc.) they are moving fast with road development “INDEPENDENT”.
- WEST AFRICA (12 countries) BENIN, BURKINA FASO, GHANA, IVORY COAST, CAPE VERDE, NIGER GUINEE, SENEGAL, TOGO MALI, BISSAU GUINEE, SIERA LEONE
- CENTRAL AFRICA (7 countries) BURUNDI DEM. REP. CONGO CHAD RCA CONGO GABON CAMEROON • EASTERN AFRICA (8 countries) KENYA TANZANIA RWANDA UGANDA ETHIOPIA ZANZIBAR DJIBOUTI COMORES
- SOUTHERN AFRICA (7 countries) MOZAMBIQUE MADAGASCAR NAMIBIA ZAMBIA ZIMBABWE MALAWI LESOTHO