Grn owe City of Windhoek N$20 million as municipality defends service disconnections
Government ministries currently owe the City of Windhoek approximately N$20 025 932 in outstanding municipal accounts, as the municipality defends its policy of disconnecting water and electricity services to defaulting customers as a key tool for improving revenue collection.
Responding to questions on the effectiveness of its debt recovery measures, the City said service disconnections have played a significant role in encouraging payment compliance and protecting municipal finances. “The total outstanding amount owed by government ministries currently stands at approximately N$20 025 932,” said the City’s Section Head of Corporate Communications, Lydia Amutenya.
The disclosure comes amid heightened debate over efforts by local authorities to recover unpaid debts from government institutions, businesses and residents.
According to the City, disconnections of water and electricity services for overdue accounts have yielded positive results and remain a critical component of its credit control strategy. "The City of Windhoek's credit control measures, including the disconnection of water and electricity services for overdue accounts, have contributed positively to revenue collection. These measures encourage payment compliance, prompt the settlement of outstanding accounts, and facilitate the conclusion of payment arrangements with customers experiencing financial difficulties," Amutenya said.
Amutenya further rejected suggestions that the municipality is in a weaker financial position than it was during the first major debt recovery campaigns undertaken in 2021. “No. The City is not financially worse off than it was in 2021. Disconnections of defaulting accounts form part of the City's ongoing credit control and debt collection processes and are implemented on a continuous basis when account holders fail to meet payment deadlines. These measures help maintain revenue collection and support the City's financial sustainability," she said.
The City’s comments follow a recent directive by Urban and Rural Development Minister James Sankwasa instructing local authorities to disconnect water and electricity services to government ministries, state institutions and large businesses that fail to settle outstanding municipal accounts.
Defending the directive earlier this month, Sankwasa said government entities should not receive preferential treatment when it comes to paying for municipal services. “There is no exemption. Ministries and government institutions are required to pay for services rendered by local authorities.
Neither the Local Authorities Act nor the State Finance Act, which authorises the annual budget and subvents state money to various local authorities, grants exemptions,” he said.
The minister argued that institutions facing financial constraints should negotiate payment arrangements rather than expect municipalities to continue carrying unpaid debts. “Hospitals can make arrangements for monthly settlement of outstanding and current bills with respective local authorities. We must not destroy the country because of understandable but self-defeating reasons,” Sankwasa said.
In a circular issued on 21 May, the minister warned that widespread non-payment by government entities and major businesses has left many local authorities struggling to provide services. “The non-payment for services rendered to government ministries, big businesses and other government institutions by the local authorities has rendered most, if not all, local authorities bankrupt and unable to render or manage the required services to the residents,” the circular stated.
Sankwasa also questioned why municipalities frequently disconnect services to ordinary residents with relatively small debts while allowing institutions with substantially larger arrears to continue receiving services. “In most cases, local authorities are suspending water and electricity service to poor residents who may in some instances only owe a mere N$1 500, leaving government ministries, government institutions and big businesses owing thousands or nearly a million,” he said.
The minister has repeatedly linked poor municipal finances to deteriorating service delivery, including infrastructure maintenance and road repairs. “All of us politicians, the federal public, including you journalists, are up in arms against local authorities for poor service delivery, poor roads and potholes which are never attended to year in and year out because local authorities do not have money,” he said.
“And now when local authorities must collect their money, some people and some journalists want to see such steps as uncalled for. What do we Namibians really want to be done in this country?”
The debate comes against a backdrop of mounting debt across the local government sector. Last year, NamWater reported that local authorities collectively owed the bulk water supplier N$2.4 billion, while the Electricity Control Board said local authorities and state-owned enterprises accounted for hundreds of millions of dollars in arrears owed to NamPower.
As councils seek to improve revenue collection and reduce growing debt burdens, the City of Windhoek maintains that disconnections remain a necessary enforcement mechanism to ensure customers, including government institutions, meet their payment obligations and contribute to the sustainability of municipal services.
