By Kingsley Jassi:
Roads Fund Administration (RFA) has projected to generate K272 billion this year through the Fuel levy alone.
This is coming after a three-year drought.
According to RFA Director of Finance Alex Makhwatha, the projection gives the fund momentum to return to the bond market.
This follows the recent unlocking of the Fuel Levy through the resumption of the Automatic Price Mechanism on fuel prices, a development Makhwatha said had boosted market confidence.
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RFA has since also seen toll fee revenue growing by nearly 100 percent, raking in K1.8 billion in the first quarter, representing 96 percent growth compared to the corresponding period last year.
The first road bond to be issued by RFA was for the construction of Area 18 Interchange in Lilongwe and, according to Makhwatha, what was to be a seven-year bond was fully repaid in three years, manifesting the viability bonds.
“We are also planning to pay off the bond on the six lane roads [in Lilongwe] before the initial period so that we concentrate on the new projects,” he told journalists in Lilongwe yesterday.
He said the arbitrary reduction of the toll fee in 2022 affected revenue flow, such that it was difficult to do road maintenance.
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Apart from the reduction of toll rates, RFA revenue was affected by the suspension of the Road Levy for the three-year period, incurring K273 billion in arrears.
The re-introduction of APM has, therefore, enabled RFA to start financing serious maintenance of the M1 and city roads, splitting K100 billion equally.
The increased revenue would see the planned construction of four additional tollgates on the Lilongwe-Salima Road, on the M1 Road in Mponela and Nkhamenya and at Chileka along the Mchinji Road.
Tollgate system was introduced to diversify revenue and reduce fiscal pressure on road financing.
In the Public Finance review, the World Bank calls for greater autonomy of State-owned enterprises to improve performance and cut fiscal pressure.
“Political interference and limited autonomy weaken governance and operations. This is compounded by policy distortions—such as tariffs set below cost recovery and unfunded non-commercial mandates to further strain finances,” the report observes.
Speaking recently, Malawi Stock Exchange Chief Executive Officer John Kamanga challenged public institutions to explore the bond market.
