Namibia: Interview with Penda A. Kiiyala

Penda A. Kiiyala

CEO (Road Fund Administration)

Penda A. Kiiyala

The Road Fund Administration is a Namibian statutory body with a vision to achieve safe ad economically efficient road sector in Namibia. Could you please give your thoughts about the evolution of your company since its inception.

Namibia, like many other Southern African countries especially the member states of SADC, used to get budgetary allocations from the Government to benefit the road network but since the trend is to make road users pay for the road network they are using, reform processes were started in 1999 culminating into the formation of the entities, namely, the Road Fund Administration, the Roads Authority and then the Road Contractor Company whereby the responsibility for constructing, maintaining and rehabilitating the road network is left to these entities rather than to the Government per se. It does not mean all the responsibility is now only to be carried by these three entities; the Government still remains the main shareholder of the three entities because they are state-owned enterprises. From time to time, if these entities cannot make ends meet in terms of financial resources, the Government, through the Ministries of Finance and Works, Transport and Communication would step in.
So far since 2000, I think things have been going well at least in terms of maintaining the road network. We have been doing our utmost best to keep the national roads at acceptable standards. As you may know, Namibia wants to be known as the hub of the transport sector in the SADC region. We already have an impeccable road network 16 years after independence and we are trying to keep up with the demands of the sector. RFA was established through an Act of Parliament (Act 18 of 1999) and it started its operations in 2000.

Could you please give us key figures about RFA in terms of employees, in terms of budget etc?

We operate a five-year business plan and on annual basis we utilise about NAD700 million and that is our budget. However, this budget fluctuates a bit depending on the revenue collected. Most of our income, approximately 75 percent, comes from the fuel levies that are collected from the motorists every time they put petrol and/or diesel into their cars at filling stations. We get NAD0.77 in every litre in terms of revenue while the rest, about 3 percent, comes from cross border charges and about 10 percent comes from licence and vehicle registration fees that are also collected by another agent being, Namibia Traffic and Information System (NATIS). The rest comes from fines levied against those contravening the law, for instance, abnormal trucks and vehicles that are overloaded are charged to curb damage caused to the road network. Recently, we instituted the collection of Mass Distance Charges (MDC) and these fees are meant to be paid by heavy vehicle owners (operators) because in terms of equity, if we only continue with increases of the fuel levies, we observe that we are over-recovering on the small motor vehicle owners while we are not recovering anything in terms of equity from those who own heavy vehicles. We started with the system on the 1st April 2006 and we foresee to collect about NAD100 million towards our revenue in this financial year.

How do you collect your revenue?

For MDC, at least for the next 12 months, will be collected together with the licence fee. When one pays their licence fees, there will be a fee on top of the licence fee and this is based on theoretical calculations that an average vehicle owner will travel 85,000 kilometres in Namibia in one year and so this is the fee we are charging. Obviously if you have not done those mileages, you can come to us with proof that you have travelled less than 85,000 km and we will refund the difference. In these 12 months, we foresee to design a Global Positioning System (GPS) that we would put in operation, to be installed in all the registered heavy vehicles to enable us to track their movement. We would be able to charge these vehicles on the actual distance they have travelled.
This fee applies for both local and foreign registered trucks and trailers.

Do you have any other fees you want to implement during this year 2006 and 2007?

We are looking at different ways and means of generating additional revenue but that might require amendment to the Act to allow us to investigate more options. There are very limited ways of us getting extra resources within the current legal framework. For instance, one can only borrow money from financing institutions with a guarantee from the Government. Since RFA is a state-owned enterprise and Minister of Finance would like to be prudent by keeping Namibia financially sound and solvent, she would always and carefully want to satisfy herself with the merit and viability of individual cases. So far we have borrowed NAD650 million from the local market, which we are trying now to repay. However, these resources are already used up and we need to request more guarantees for borrowing because the needs of the road network are always in excess of the revenue that we collect.

Have you already borrowed money from American institutions, banks etc?

Not yet. There were loans that were acquired, not by the Road Fund Administration but by the central Government before the year 2000 when RFA came into being. The Ministry of Finance has not transferred these loans to us but at least we have utilised the loans for instance from African Development Bank, European Investment Bank, Arab Development Bank and BADEA. The Ministry of Finance is currently in the process of negotiating with the Japanese Bank for International Cooperation for a loan.

What are the needs in terms of investment for the network in Namibia?

The needs are many and we want to invite the private sector to be our partner in constructing, rehabilitating and maintaining our road network. We do not want the Government to be the only player in this sector because the road network is for all of us and remains a national asset. So far the private sector has not been forthcoming in actively contributing financially to the national road network, may be we need to package some incentives for them. There are many incentives, for instance, the tolling system, which can be used to get the interest of the private sector. So we really want to call on especially the private sector, because they are the engine of growth of our economy, to come and join us in the development of our road network.

Namibia has one of the best road network in the whole of Africa, you have a very big port, the port of Walvis Bay, do you think in the near future, through this port and this road network, Namibia will become the hub of the Southern African region?

That is our aim to become the hub of the region if not of the continent. Due to our strategic position in the south-western corner of the continent, we are at the crossroads of the routes from America, Europe to Asia in terms of the sea. This is our dream and aspiration and I think it corresponds well to our Namibia Vision 2030 whereby we would like to become an industrialised and well-developed country by the year 2030. The only challenge is accessing sufficient resources to develop the network to such a standard that everybody using the network will not have any hindrance, impediments and risks. The second one is getting enough investors to commit resources to that network and stimulating economic activities, which will assist us in recovering the investment so committed.

For those projects, those PPP projects, in areas such as the rehabilitation of roads, would you be interested in American investors coming here to team up with the Government and all other companies to rehabilitate the road network?

We always look forward to Foreign Direct Investment (FDI). In a globalized world, one cannot be island, otherwise you will be left behind. The world has become almost borderless, things are happening in South Africa, in Botswana and in Angola, a country that just emerging from a protracted civil war and we need to stay at pace with these countries and stay connected to them.

Your Government has set Namibia Vision 2030 aimed at making Namibia an industrialised and developed nation by then. How is your company contributing to this vision?

The Road Fund Administration is actively contributing to the realisation of the objectives of Namibia Vision 2030 because we know that without physical infrastructure, one cannot really make progress in terms of economic development. More so in a country with a vast road network and which has a few people scattered all over this huge country, one cannot do without a good infrastructure. We feel obliged to keep the road at acceptable standards to contribute to and stimulate the economic development. This is the only way we can contribute to Namibia Vision 2030. Before I joined RFA, I was with the National Planning Commission and I was a member of the National Core Team that drafted the vision. In that regard, I feel that I have made some input already in one of the objectives of Namibia Vision 2030. We have received some documents from the central Government recently whereby the National Planning Commission requested us to look at the implementation strategy for Vision 2030 and to see if we could make our input there also. So we are looking at the section pertaining to the road sector so that we could have our comments to be incorporated in the strategy.

We are also very interested in the man behind the position. Could you please tell us a little bit more about yourself, professional background, how did you come to the RFA?

Before I came here on 1st June 2005, I used to be a Director of Development Cooperation in the National Planning Commission for seven years. My directorate was responsible for the mobilisation of resources to Namibia especially from outside. After independence, there was a lot of goodwill from international agencies and friendly countries whereby Namibia received some grants and some concessional loans and my main responsibility was to source and manage those grants. If there were no resources, I talked to external agencies to assist us. Before that, I worked with an oil company owned by Chevron and Texaco, called Caltex. I was an Assistant to the Managing Director for four years. Although I have not studied energy, or technology related to energy and so on, this job gave me a wonderful insight into what is happening in the oil industry. In terms of schooling, I studied political science in Virginia (USA), and from there I went to Britain where I completed a Maters Degree in International Relations at Reading University. In 2004, I did some further studies through correspondence with the Maastricht School of Management in the Hague and completed a Master in Business Administration degree.

Could you please tell us what has been your biggest satisfaction with your career in the Road Fund Administration?

I did not mention how big RFA is. It is rather small with a staff compliment of 16 staff members only. One thing I enjoy is therefore looking after a small company with a big responsibility like RFA. It is like a family to me. Our family is small but I think administering a budget of about NAD700 million per annum can be quite a challenge. The small size of the company makes it much easier to build relationships. For me the high morale and the expertise displayed by my team in carrying out responsibilities and the focus they display to carry out the mandate given to us is the main source of my satisfaction.

We are here in Namibia to promote this country abroad and especially in the USA. What would your last message be for the USA investors who might want to come and to be partners with you in the many projects you spoke about specifically the PPP, etc?

The message I really want to convey especially to the American investors is that Namibia is open for business. We have a functional economy, we have political stability and we have attractive investment incentives. So, if these potential investors could come to engage us through the public private partnership, we are welcoming them with open arms. We need resources but obviously we have also something to offer in return which include a conducive investor friendly environment for them to do business and repatriate their profits. For us, to achieve and attain Namibia Vision 2030 and to make progress in alleviating poverty and thereby contribute to international peace, this is our central preoccupation. There cannot be permanent peace if there are some people who are suffering and who are poor without access to resources, while other parts of world are affluent.