The Chief Executive Officer of the National Road Fund of Liberia (NRF), Boniface D. Satu, has underscored that the current Road Fund Amendment Bill being debated in the House of Representatives will capacitate the NRF to source funding, mitigate fund flow risk and allow matching funds and international financial institutions to lend money for road infrastructure. He said the bill is not a “political football” but in the best interest of the country.
In his analysis, Satu said governments establish road funds, road fund boards and road agencies to improve on road financing and management. According to him, many African countries started with first generation, meaning under the control of government, and today almost all road funds are second generation—100% autonomous and far less interference. In fact, he added, Liberia established its Road Fund with 1st generation (government), but felt short of elevating it to a road agency, which gives appetite to donors to participate in PPP, matching funds, cost recovery, etc.
The NRF boss argued that donors will not be encouraged until the government does those things that provide sustainability, transparency and accountability in the road sector.
Satu’s analysis comes almost six months since the a bill seeking to repeal the National Road Fund Act of 2016 was introduced at the House of Representatives by Margibi County’s district #1 Representative, Tibelrosa S. Tarponweh.
In his communication in July 2022, Representative Tarponweh said the bill, when enacted, will make the proposed “National Road Fund Administration” an autonomous agency under the general supervision and direction of its Board of Directors appointed by the President of Liberia.
Satu also maintained that the amendment to the law will address a number of issues stalling the progress of the NRF, noting that international partners fully support the amendment. He disclosed, “Currently, the World Bank has an approved project, ‘Road Sector Development Project’, working with NRF and MPW on reform of Road Agency and autonomous road fund. If we want our partners to do this then we can do so by passing the bill before the House.”
According to him, “Appetite for donor support in the road sector has decreased, especially when reform has not taken place for the NRF to transition to a road agency, road authority and 2nd generation road fund.” He warned that Liberia needs to swiftly master the trend of global financing in order 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) and the rise of green energy in the automobile industry. “We need to watch out for fuel efficient and electric vehicles,” he further warned.
Satu disclosed that the world is changing, and that by 2030 both Europe and USA will be banning fuel cars and moving to full scale electric vehicles. “USA is investing over 600 million for electric vehicle charging system and reducing emission. Norway is currently using 100% electric vehicles. Fuel tax revenue will be challenged. The world finding alternative financing for tolling is the new normal,” he said.
He emphasized that due to international economic and financial crisis and the rise of green energy in automobile industry, a new paradigm has to be found to increase road fund revenues; therefore, most countries have moved towards 100% autonomy of road funds.
“Ghana in recent time allowed all funds collected to be 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 the fund is attracting potential financing institutions to lend them funds. UBA has just lent them over US$300 million. Our National Legislature cannot do it too,” the Liberia Road Fund boss added.
He urged the National Legislature to take seize of the matter and ensure that the right thing is done in granting the National Road Fund an autonomous status. He brought to the attention of the first branch of government that almost all road fund institutions in Africa are independent—West Africa, 12 countries: Benin, Burkina Faso, Ghana, Ivory Coast, Cape Verde, Niger, Guinea, Senegal, Togo, Mali, Guinea Bissau and Sierra Leone; Central Africa, 7 countries: Burundi, Democratic Republic of Congo, Chad, Congo-Brazzaville, Gabon and Cameroon; Eastern Africa, 8 countries: Kenya, Tanzania, Rwanda, Uganda, Ethiopia, Zanzibar, Djibouti and Comoros; Southern Africa, 7 countries: Mozambique, Madagascar, Namibia, Zambia, Zimbabwe, Malawi and Lesotho.