Private sector must participate in infrastructure development – Kalili
First National Bank’s Senior Research and Development Manager, Namene Kalili, this week said it is very important that Namibia develops infrastructure of roads, rail, housing, but that it cannot be achieved by Government alone.
“For many years we have been advocating for much more private -sector participation and the unlocking of investment channels to increase infrastructure spend. This would lessen the burden on government so that they can focus on social services and governance,” Kalili said.
For Namibia to be world class in terms of infrastructure, Kalili said, a huge amount of money is needed, something that the Government will not be able to raise at the current tax rates.
“We feel that the private sector must start playing a much bigger role and not be seen as provider of funds only. Namibians and non-Namibians alike, use our roads and as such they should be allowed to participate and contribute towards the construction and maintenance of the roads through the right investment vehicles to enable even broader participation. We are all aware that vehicle numbers and trade volumes have increased massively within SADC countries but our infrastructure is struggling to keep up with the demand and hence the roads have become very congested,” he added.
In May this year the Namibian Government introduced the 5th National Development Plan, which encompasses a budget of N$ 69 billion of which N$25 billion is committed to roads infrastructure and another N$9 billion will be set aside for rail infrastructure.
“The funds allocated for this in NDP5 are commendable, but fact remains that there is at this moment a backlog of N$255 billion in infrastructure development and a lot has to be done if the NDP5 goals are to be achieved,” Kalili said.
In 2014, the Bank of Namibia broke down the infrastructure backlog into N$17.9 billion for roads, N$60.9 billion for railways, N$34.9 billion for ports, N$9.7 billion for airports, N$50.8 billion for energy and N$45 billion for housing.
“Over the past couple of weeks, the Namibian Road sector has been in the news for a variety of reasons, be it financially or with regard to the upkeep of numerous roads used by companies, individuals and tourists alike. Fact is, we are currently lagging behind when it comes to road and rail infrastructure, something that is of vital importance to a country that strives to become a logistics and distribution hub by 2030,” says Namene Kalili, FNB Senior Research and Development Manager.
Namene called for more ‘freedom’ in the maintenance, management and construction of infrastructure and less regulation on stakeholders as public goods and services.
“Legislation may not allow road management to be implemented for a fee. Why not toll new roads thereby increasing the transport network at little to no cost to the tax payer, and placing the expense squarely on the shoulders of those who choose to use such roads?” he questioned.
Kalili noted that this could lead to the creation of new road management companies, which could eventually list domestically to broaden equity participation, while reducing the road infrastructure backlog and increasing the quality of the national road network.
“Listed entities are usually more transparent because of the strict public disclosure requirements from the stock exchange,” he concluded.