The potential and limits of the distance-based road user charging system in developing countries: Empirical evidence from Namibia

Although the road funding framework in Namibia has been regarded as an exemplary model for developing countries, recent evidence has shown that the Road User Charges (RUCs) generated through the Roads Fund to supplement the fiscal budgetary allocations are not sustainable as the charges are not efficiently priced to generate optimal funds. Hence, this study was aimed at exploring alternative financing models for roads for Namibia, with the possibility of generalising study findings to other developing countries. The Road Network Evaluation Tool (RONET) model was applied to conduct a strategic assessment of the road network funding requirements and analyse the extent of the funding gap on both the primary and total road networks. Further, a scenario-based evaluation of alternative financing models was performed. Study results showed that the road user charges, particularly the fuel levy is set too low to generate sufficient revenue to meet the optimal funding scenario for the road network in Namibia. In addition, the study found that the introduction of a Distance-Based RUCS (DBRUCS) on the primary road network in Namibia with private sector participation is potentially feasible and could help capture some of the costs of road use that are currently not captured by the road user charges.