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Other Articles from The Villager

MVAÔÇÖs N$82m cost


by Confidence Musariri
Columns

 

In 2010, you were ‘technically bankrupt’ .

What have you done in order to avoid this mid-year crisis this time around?


ST: The Fund has been technically insolvent, not technically bankrupt for a number of years now due to a low funding level.

 

As a result, the Fund has accrued a deficit of N$543m.

This is not a favourable reality as it has put the institution in a precarious financial position thereby threatening its long-term financial sustainability.


Between February and July last year, road accidents escalated to a record high and as a result of this upsurge, medical costs skyrocketed to an almost unmanageable level where they were equivalent to the Fund’s total monthly revenue.


The Fund implemented cost management measures aimed at containing its expenses. As part of this exercise, we increased the use of state health facilities where appropriate, which brought the medical costs significantly down.

The ultimate aim is to preserve cash resources in order for the institution to be able to meet future obligations towards claimants.


You are implementing cost management measures, are there no other avenues?


ST: The Fund has proposed amendments to the current legislation. Central to the legislative amendments is the exclusion of the injury grant benefit, which currently accounts for an average of N$38m per annum. 

The objective is to focus efforts on rehabilitating people to return to their productive lives and independence, rather than compensating them for injuries sustained.

Cabinet approval for such amendments is currently being pursued. Further to that, the Fund will also pursue other sources of funding, which include vehicle levies on local and foreign-registered vehicles. Ultimately, all these interventions are aimed at complimenting the fuel levy.


 How far are the considerations for the share that the Fund gets from the fuel levy per litre in the immediate future? And are you happy with the new MTEF, in terms of meeting your obligations?


ST: The Fund does not get direct allocation of funds from the National Budget and derives its income exclusively from the fuel levy, which is determined by actuaries on an annual basis.

The Fund currently operates without an overdraft and although our balance sheet reflects a technical insolvent position, the monthly revenue is adequate to cover all the Fund’s obligations.


Fuel levy adjustments are granted by the Minister of Mines and Energy, guided by the recommendations from the independent actuaries on the funding level.

The Mines and Energy Minister in granting the increase in fuel levy, considers the global oil prices and uses his qualified discretion in effecting such increases.


How will the resolution to implement reciprocal claim handlings signed with sister MVAs from Botswana, Swaziland and RSA benefit Namibians?


ST: This arrangement brings peace of mind to Namibians who may be involved in road crashes in any of these countries as they will no longer be required to travel to that country to lodge their claims.

This resolution enables them to claim, through the MVA Fund here in Namibia, which essentially acts as an agency that receives these claims and forwards them to the relevant sister Funds for processing.


Do you think Namibians are now aware of their rights to claim and submit such claims on time? At one stage MVA had to deal with a huge backlog of claims payments that put extra strain on its funds?


ST: The Fund invests in consistent and ongoing public education interventions aimed at creating awareness and educating the public about its services and benefits as well as the claims procedures.

We have reached a stage where we can confidently say that Namibians are aware of their rights to claim from the MVA Fund.  The MVA Fund Act of 2007 states that all claims are to be lodged within one year from the date of the crash.

In the last five months, 80% of all claims have been lodged within 30 days after the crash.

I am also proud to confirm that the Fund has not had a backlog of claims since 2004.

This is clear evidence that Namibians are aware of their rights to claim.

But even with these accomplishments, we do not rest on our laurels and continue to engage the public in conversations around road safety, in order to prevent death and injuries emanating from road crashes.


Ndahafa Johannes* (28) has had three accidents and sustained injuries.

The MVA will not pay her.


ST: Claims are processed in accordance with the MVA Fund Act of 2007, which outlines the benefits to people involved in crashes, as well as limitations and exclusions to same.

Each claim is assessed within this legal framework and on its own merits, depending on the circumstances of the crash. Unfortunately, Ms Johannes did not provided us with a claim number.

In the absence of a valid claim number, it must have been impossible to provide further details on other benefits she could have been entitled to.


What was the cost of managing accidents on the country’s roads last year and how does this figure compare to previous years?


ST: The Fund spent N$82m in medical expenses.

The cost of treating patients at private hospitals are the highest cost drivers in this regard and if left unmanaged, threaten the Fund’s long-term ability to deliver on its mandate.

The Fund has significantly increased its use of State health facilities, with the highest assurance that there is no compromise on the quality of treatment given to the patients.


You seem not to have long-term solutions!


ST: The long-term solution to this financial challenge is adequate funding.

The Ministry of Mines and Energy should take into account the recommendations by the actuaries on the funding level in determining the fuel levy (increases) to the MVA Fund.


In the last financial year, the Fund spent N$4.2m in respect to Accident and Injury Prevention, an increase from N$3.6m in the previous year.

In addition to that, the Fund procured speed detection cameras and breathalysers to the value of N$2m for the Namibian Police to assist their law enforcement operations countrywide.