• September 18th, 2018
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CoW asks govt to write off N$570m debt


Windhoek The City of Windhoek (CoW) has requested the government to consider writing off debt emanating from government loans. As of 2013, CoW had current assets of about N$531 million with current liabilities in the range of N$941 million. While the current liabilities far exceed current assets, the City’s acting chief executive officer, Filemon Hambunda, noted in a statement that current liabilities include loans from lending agreements, in particular with government, amounting to about N$575 million. “Should government consider writing off this debt, it will naturally place the City back into a healthy financial position,” Hambunda said. “As a matter of fact, these loans are not supposed to feature under liabilities but under long-term loans,” the acting CEO said in a statement read on his behalf by the City spokesperson, Josua Amukugo. CoW also reacted to an article in The Namibian newspaper titled “Windhoek on the brink of bankruptcy”, which extensively quoted a 2013 report by the Auditor General. “When the report was submitted, it included invoices of the City’s bulk suppliers, namely NamPower and NamWater, that normally get paid in July of the subsequent financial year,” noted Hambunda. He added that monthly payments to NamPower range between N$125 million and N$130 million, while NamWater receives N$25 million to N$30 million from the City every month. CoW yesterday said it has a budget deficit of N$287 million, but noted that it has put measures in place to save costs. The Namibian reported that the City is in a N$1.2 billion deficit and further alleged this put the municipality on the brink of bankruptcy. “The City of Windhoek still manages to meet its monthly payment obligations and has a sound monthly income that enables it to meet its expenditure,” Hambunda countered. “It should further be noted that the City’s financial position further reflects its corporate mandate of an institution that is not for gain or profit, but that should also function sustainably, hence all revenue generated by the City is directly re-invested back into infrastructural development and operations,” Hambunda explained. Amukugo also noted some of the challenges the City faces, which include lack of external capital expenditure funding, lack of government subsidies for vulnerable residents, the high cost of bulk supplies from NamPower and NamWater, urbanisation, high unemployment, outstanding general debt of N$514 million and government and parastatal services accounts that total about N$50 million. Commenting on the progress of additional revenue streams for the capital, Amukugo said the City does not want to exert more pressure on already cash-strapped residents by introducing new taxes. He noted that the City would rather increase the efficiency of the collection of outstanding debt. Also, as the City has scrapped the auctioning of land, which in the past paid for the servicing of land in new residential areas, Hambunda said the idea of the pre-allocation of land even before it is serviced is being mooted. This, he said, could possibly assist in the generation of revenue to service land.
2016-03-17 09:17:06 2 years ago
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