‘Road funds, resource mobilisation vital’

PASCAL Chibanje of Kitwe wrote: “I refer to your recent articles on road tolling and how the practice has evolved in Sub-Saharan Africa. These articles attracted my attention particularly because they relate to my area of research. I would be grateful if you could, therefore, provide more information, especially, on how effective road funds have been given the argument that they reduce fiscal flexibility.”
Since the question borders on the effectiveness of road funds, generally, it may be helpful to start with a definition of a road fund.
And three key, but not exhaustive, principles can amount to that definition: road funds involve road users in the management of roads, through payment of tolls and other road user charges, secures enough money for road works year after year, and establishes a system for financing road maintenance programmes with clear accountability and regular technical and financial audits.
As general principles, one cannot object to such a transparent, predictable, and accountable framework, which ought to be consistent with the requirements of good corporate governance for the road sector anywhere in the world.
With the right sort of administrative and financial management arrangements, Road Funds do enjoy the wider benefits of the agency model – such as the National Road Fund Agency (NRFA) – with the freedom to focus on service delivery and the resultant greater efficiency and effectiveness this provides.
But while being sympathetic to the principles defining a Road Fund, it is true that one might be dogged with fiscal flexibility concerns and the realism of this funding mechanism particularly in developing countries where bad roads have been endemic for decades.
Although the criteria for assessing road funds remain relevant, Road Funds have had some success in stabilising road financing, improving works programming efficiency, and encouraging a resurgence of the domestic contracting industry.
World Bank evidence has shown that Road Funds have not undermined fiscal flexibility but have improved the administration of road funding (in terms of execution capability) and its outputs (in terms of road conditions) in countries, such as Zambia, where a formidable list of institutional and financial requirements has been fulfilled for a dedicated Road Fund to be effective.
An overriding theme leading to this improvement, has been the need to consider road funding within the wider context of comprehensive road sector reform, with proper attention to long-term consistency and co-ordination between all stakeholders.
But among the reform issues which need further attention are the broadening of the Road Fund resource base.
On its part, Zambia, is now working at broadening the road sector resource envelope as the NRFA implements Phase II of the National Road Tolling Programme covering all vehicle classifications.
And working with other stakeholders such as the National Council for Construction (NCC), the NRFA has also strengthened the capacity of implementing Agencies and local authorities to plan and implement road maintenance in a timely manner; and systematically addressed the financial needs of roads outside the core road network; and building the capacity of local contractors and consultants.
It goes without saying that almost all Road Funds in Africa have drawn their attention to these issues and are favourably disposed to the concept of commercialising roads and moving them closer to the boundary between the public and private sectors in order for them to be even more effective.
Commercialisation of roads has been enhanced, specifically, by the continuous exchange of knowledge and information under the African Road Maintenance Funds Association (ARMFA), a 34-member non-political, non-profit-making association of Road Funds on the continent whose objective is to bring African roads to a common level of existence.
Zambia, through the NRFA, is the immediate past President of ARMFA and has led this critical networking among African countries taking into account the importance of roads as a vector for socio-economic development of African countries particularly in the fight against poverty.
Only last week, the Agency led by its board chairperson Christabel Michel-Banda joined the Ministry of Finance delegation to the African Development Bank (AfDB) in Cote D’Ivoire and in parallel, the Agency identified common areas of cooperation between the NRFA and the Cote D’Ivoire Road Fund and created synergies necessary for ensuring the best condition for the mobilisation of financial resources for road maintenance much to the appreciation of the parent Ministry.
The move towards full commercialisation of Road Fund mobilisation and management to enhance the efficacy of Road Funds further is, however, gradual and requires road user acceptance and support.
Should you have any questions or clarifications regarding toll roads, please do not hesitate to contact us using: Road Tolling Corner, P.O Box 50695 Lusaka. E-mail nrfa@zamnet.org.zm

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