MVA fuel levy suspension came as big shock

Obrein Simasiku

The Motor Vehicle Accident Fund had to suspend some of its capital projects and streamline its operations, following the sudden suspension of its share of the fuel levy.

The Chief Executive Officer of MVA Rosalia Martin-Hausiku says the suspension of levy came as a big shock, saying that she hopes that it does not go beyond the three month-period to give a reprieve to motorists.
Despite this shock, Martin-Hausiku was however quick to say that the fund has not yet started feeling the pinch.

The Ministry of Mines and Energy in April announced that it was reducing fuel levies by 25 and 50 cents in an effort to offset the sky rocketing fuel prices.

“When the consultations started that government through the mines ministry intended to preliminary suspend levies, then we had to do a stress absorption and also do an internal planning to streamline our operations,” she said, adding that such proactive approach assisted in staying afloat.

In addition, she said, the ministry wanted to cut off up to 70 percent of the 47 cent levy collection, because they were under impression that the fund was loaded after revelation of N$2 billion asset base.

“Yes we had an asset base of N$2 billion, but that doesn’t mean we have cash laying there, like we can get it anytime hence apparently necessitating a cut,” explained Martin-Hausiku during a media engagement.

“it was wrong. We just have assets worth that but not entirely available money. So it was until we engaged that they understood it’s not money laying there and then opted for the 50 percent cut.”
In terms of revenue loss, she said the asset base currently stands at N$1.8 billion while liabilities are at N$900 000.

Furthermore, she said since the advent of Covid 19, MVA lost N$23 million. Since then, she says, their savings scheme went in tatters and now they only have a maximum of N$10 million in a good month. Previously, they would save around N$30 to N$35 million.

Emergency base

In addition, the CEO said they are planning on constructing an emergency base at Divundu in the Kavango East, which seeks to absolve the severity of accidents happening between that area which extends to the Zambezi Region.

As such, the CEO noted that chances are higher of people succumbing to injuries sustained in Katima Mulilo due to distance to the nearest standard service provider as well as poor health facilities. Katima Mulilo is 300km away from Divundu and a 500km from Rundu.

“So with our emergency station, we hope to address and minimise any losses of life emanating from accidents. Most of the time Katima cases are referred to Rundu or Oshakati which are very far, and mostly air lifted,” she added

Prior to 2016, MVA was insolvent with almost N$100 million. The levy was increased to 47 cents a litre in 2013 and has been stagnant since then. The fund said, despite having implemented increment it did not mean immediate profit accumulation.

Expenses per year are estimated at N$420 million.

By Observer