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BUSINESS PROCESS REENGINEERING: THE STATUS OF ROAD FUND IN ZAMBIA

By Bernadette Deka-Zulu (PhD Researcher-Public Enterprise)

THIS article highlights the benefits of Business Process Reengineering (BPR) in the Zambia National Road Fund Agency (NRFA). It explores ways that are utilised in the process to improve their performance and increase revenue.

In recent years, delays or bottlenecks in payments of the road and bridge construction contracts have caused a major problem for their financial viability.

Such delays have seriously affected the normal flow of business operations at the NFRA  leading to consequential economic hardships, especially regarding projects where corruption is involved. 

This has led to serious problems with funding these projects, thereby also affecting other important sectors like agriculture and commercial activities. This is occasioned by most roads being unfit for use which has caused huge losses to farmers due to crop loss or due to unavailability of quality seeds and fertilisers.

Also affected are businessmen who require access to international markets cannot do so because of a lack of local commodity dealers in most parts of the country.

In Zambia, the government has been trying to improve the efficiency of its road fund. The government wants to make sure that money is being spent effectively and efficiently, and it’s trying to find out what works best.

The road fund is a collection of funds that are used to pay for roads in the country. The money comes from taxes on vehicles, fuel, and sales tax; the road fund in Zambia is run by a government-led organisation, the National Road Fund Agency (NRFA).

NRFA is responsible for administering and managing all financial resources in the Zambian road sector. The functions of the NRFA include the administration and management of the Road Fund and recommendations to the Minister on fuel levy and road user charges and tariffs.

The NRFA was established in 2002 by An Act of Parliament under the National Road Fund Act No. 13 of 2002. The Government of the Republic Zambia (GRZ) was mandated to create a fund from current revenues and to use this revenue for the construction and maintenance of national road networks throughout the country, especially along strategic corridors and within corridors where there is a high impact on development.

Issues surrounding the Road Fund

The Zambian government has a road fund that pays for infrastructure development, but it’s not working very well. The road fund has been a victim of years of underfunding and mismanagement.

The government has prioritised other projects over funding the state of the roads, and it has not done enough to ensure that the money it does spend on roads is spent on improving them.

This lack of attention is particularly evident in the case of Zambia where the country’s population has grown by nearly 20 percent in recent years.

This means more vehicles are on the road, and means more traffic jams. It also means more accidents, which means more people are injured and worse roads to travel on.

Some of the main issues that surround this fund are;

  • Resource shortfalls/ inadequate funding; Due to a lack of funds, the road fund has been unable to adequately maintain the level of service that Zambia’s Road network provides. The funds allocated were inadequate and needed to be increased. 
  • Lack of sustainable fund
  • Poor maintenance of vehicles and equipment. 
  • The government doesn’t want to rake in a financial loss on the project so they always give short notice to stop work or do repair work on the road that was already completed.
  • No coherent policy to address the decline in maintenance of its infrastructure.

Following numerous complaints, by mostly the road users regarding the poor state of roads that caused accidents and various traffic related issues.

The government through its agencies engaged a BPR and came up with some solutions to increase funding and sustainability of the fund. 

It was clear that the government needed to increase its budget for road infrastructure. This allowed for significant improvements in infrastructure along with increased safety for all users of Zambian roads.

Two notable solutions were highlighted;

  1. Introduction of Toll gates: To mitigate the loss of investments in road infrastructure, the Zambian government has introduced road tolls as part of its strategy to improve financing for road maintenance. Following the enactment of Tolls Act No. 14 of 2011, Phase I of the National Highway Toll Collection Programme (NRTP) commenced on November 1, 2013.

Two years after that, Zambia introduced the Treasury Single Account (TSA) system. It is a uniform structure of bank accounts that provides a consolidated position in government cash.

Funds raised by the NFRA at the toll booths were first credited to the Consolidated Accounts before it was allocated to the RDA for road maintenance. This new financial management system increased the risk of resources being diverted to other government projects

  • Introduction of e-Road Tax; Zambia’s e-road tax is a way to ensure roads are maintained, reducing the number of funds that would be spent on repairing or improving roadways.

It also provides insight into which roads are most in need of attention. Zambia launched e-road tax in September 2018, immediately after the country adopted the e-payment system through SMS and mobile money application.

As a result, individuals can pay road transport taxes directly after registering on the website and receiving a personal password. The process is quite simple for most categories of business such as taxis, pick-up trucks, and delivery trucks; motor rental companies; motorboat rental services, etc. This helps tax officials to collect more revenue from vehicles.

Despite the introduction of these two notable solutions, the road network in Zambia is still not up to standard and requires more intervention. 

One would ask, with the introduction of road tolls and e-road tax payments, there is an increase in the road fund. Why is there still slow progress on road maintenance?

The issue is not entirely on adequate funding but rather accountability and transparency of fund usage

To deal with the issues surrounding the road fund, the government through its agencies needs to engage in further business process reengineering exercises to improve the way it manages its road funds. 

The reengineering exercise can be carried out in two phases;

The first phase focusing on improving the management of existing road funds and identifying areas that need improvement, and the second phase focusing on improving performance by changing processes and procedures within the agency, as well as reducing costs through better resource management.

Engaging in these exercises is part of a wider effort in the reengineering process to improve financial transparency and accountability.

BPR and recommendations

BPR would be an exciting approach to improve the road funds’ efficiency. It would help NRFA identify, reassess and transform business processes to improve how the fund is collected and disbursed towards road infrastructural development.

The BPR approach is becoming more popular in the government of Zambia as it seeks to deliver services for better outcomes and predictability.

The approach is based on the quality of experience that government provides for its citizens. This can be translated into a business process through which Government delivers its services.

Considering the BPR approach, here are some recommendations for improving the road fund in Zambia:

  1. Build a system of accountability within the fund that lets citizens know exactly where their money is going.
  2. Use more public-private partnerships and less government spending to accomplish the same goals.
  3. Encourage local contractors and small businesses to bid on contracts, rather than just awarding them to large ones.
  4. Improve planning: Unfortunately, we see little evidence that Zambian officials have been doing much planning around how money should be spent.
  5. Increase transparency by constantly publishing data about how the money is spent and who gets it
  6. Provide clearer guidelines on how to spend the fund and when (and if) to use it for projects that just need to be done
  7. Implement a process reengineering approach for each department so that they work together more effectively and efficiently, increasing efficiency and effectiveness.

As emphasised through out this article, the road fund is an important part of road infrastructural development as road networks affect different parts of the economy.

Therefore, it is very important that process reengineering exercises are carried out often in order to cut out inefficiencies, corruption, and various loopholes to make the road fund as efficient as possible.

(bernadettedekazulu@gmail.com)

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