History of the Roads Fund Administration

Initial Road Sector Reforms

In reaction to deteriorating conditions of the road network and its adverse impact on economic growth, the Malawi Government was part of the World Bank supported Sub-Saharan Road Maintenance Initiative (RMI) which was launched to facilitate policy and institutional reforms that could result in sustainable management and financing of public road services.

In response to the findings and recommendations of the RMI studies, the Malawi Government enacted the National Roads Authority Act in 1998 that created the National Roads Authority (NRA) – an autonomous body to manage the public road network – and a dedicated Roads Fund, managed by the NRA itself to cater for the maintenance and rehabilitation of public roads. The NRA was governed by a Board with a majority of private sector representatives which was reporting to the Ministry of Transport. Fuel levy and international transit fees were introduced as sources of funds for the Roads Fund.

In the structure of the NRA, a single institution was managing and administering the Roads Fund, allocating to itself financial resources for the maintenance and rehabilitation of roads and was also itself implementing the road works. Emanating from the weaknesses of this combined structure, some challenges expectedly arose, such as reallocations of funds to unplanned programmes, over expenditures and creation of arrears in the road maintenance and rehabilitation programmes.

Further Road Sector Reforms

In order to deal with these challenges, the Malawi Government in 2006 repealed the National Roads Authority Act (consequently closing the NRA) and enacted two pieces of legislation as follows; (

  1. The Roads Authority Act and
  2. The Roads Fund Administration Act

The key objective was to separate the implementation function from the financing function of the then NRA’s combined structure.

The Roads Fund Administration Act established the Roads Fund Administration with the objective of raising, administering and accounting for funds for construction, maintenance and rehabilitation of public roads and to manage the Roads Fund. The Act specifically provides that the Roads Fund Administration be controlled and governed by its own Board of directors which is responsible and accountable to the Minister of Finance, Economic Planning and Development.

The Roads Authority Act established the Roads Authority with the responsibility of ensuring that public roads are constructed, maintained or rehabilitated at all times. The Act specifically provides that the Roads Authority be controlled and governed by its own Board of directors which is responsible and accountable to the Minister of Transport and Public Works

The new reforms were aimed at enhancing checks and balances, transparency and accountability and promoting efficiency in the management and financing of public roads in Malawi.