Susana David
Residents of Windhoek, Okahandja, Walvis Bay and Rundu have in recent months demonstrated against the approach employed by RedForce in its efforts to collect debt on behalf of various local authorities. The residents felt harassed and described the debt collection process as dehumanising and forceful. It is worth noting that local authorities countrywide continuously struggle to recover billions of dollars in municipal service debt owed by residents, and have thereby enlisted the services of Redforce Debt Management CC to collect outstanding water, electricity and refuse payments. Redforce has earned itself a track record of effectively collecting debt for local government, universities and banks, among other institutions. The situation is however dire for the concerned local authorities as residents do not honour their financial obligations and local authorities lack resources to perform the debt collection service.
The City of Windhoek is owed N$1,2 billion by residents, corporations, parastatals, government institutions, agencies and ministries. The debt is said to have been outstanding for more than 20 years. Similarly, in Rundu, the residents owe the town council an amount of N$400 million for services rendered, of which only N$41 million was collected between January and August 2023.
In the coastal town of Walvis Bay, the residents owe the town council about N$375 million, while in Okahandja, residents owe N$200 million in respect of water consumption, rates, taxes, refuse and land sales. As a result of unpaid water and electricity bills, local authorities have opted to disconnect services for those in arrears. This has prompted many residents to fetch water from public taps using wheelbarrows and containers, while others buy water from neighbours and family members in affluent areas.
In carrying out its mandate to recover debt from defaulting residents on behalf of the local authorities concerned, RedForce has been accused of ruthlessly cutting water and electricity services of residents who fail to settle their debts, thereby denying the affected residents access to basic municipal services.
Many residents have voiced their frustration concerning the exorbitant amounts of money charged by local authorities monthly for water and electricity services, which puts a huge strain on their finances. Moreover, residents maintain that RedForce is solely focused on monetary gains while completely ignoring the circumstances of residents, which mostly contribute to them defaulting on payments.
In addition, residents claimed that there were no prior consultations when local authorities appointed RedForce to render debt collection services, thereby strongly demanding the company’s removal.
Furthermore, some residents in the towns of Okahandja, Rundu and Keetmashoop, claim that the right procedures were not followed in the enlisting of RedForce. While it is commendable that Redforce is carrying out its mandated obligation as contracted by various local authorities, it is critical that circumstances of defaulting residents are considered, including the loss of jobs exacerbated by the Covid-19 pandemic, high youth unemployment rate, increased water and electricity tariffs and single-income households. In addition, the United Nations Population Fund (UNFPA) revealed that forty-three percent (43%) of the country’s population is experiencing multidimensional poverty. It goes without saying that access to clean water is a fundamental basic human right as per Article 6 of the Namibian Constitution.
Additionally, one of the most important aspects of the public sector is public debt management (PDM), which necessitates proactive management, administration, monitoring, and evaluation on the part of the government. Debt/borrowing is a key source of finance for promoting economic growth, easing socioeconomic problems, and eradicating public debt.
The Government can initiate loans that are meant to assist citizens to pay off their debt of water and electricity, a modality that can prevent them from having accumulated debt of water and electricity bills.
Another, issue encountered by Namibians is the high unemployment rate, poverty and inequality which were made worse by the Covid-19 pandemic and as of recent Namibians experienced quite a number of increases in the repo rates and other rates and taxes, living those with stagnant salaries not able to afford to keep up with the maintenance of their water and electricity bills. However, without finances, council cannot provide quality municipal services, a bulk of which is generated from rates and taxes, refuse, land fees, water and electricity. In turn, the money goes toward servicing land, sewerage and sanitation, refuse removal, provision of water and electricity amongst other basic municipal services. Local authority councils are therefore put between a rock and a hard place, expected to deliver quality municipal services to defaulting clients, a situation that is not sustainable.
Therefore, council and residents need to find common ground and identify sustainable coordinated solutions as partners. It is also critical that government through the Ministry of Urban and Rural Development find adequate avenues in which debt owed to local authorities is responsibly collected, taking into account financial difficulties faced by many households.
Local authority councils can also provide relief by finding innovative ways in which defaulting residents can pay off their debt, and the installation of prepaid water and electrical meters. Councils may also consider installing free prepaid electricity meters for the elderly, and also consider writing off debt owed by pensioners as well as waive accumulated interest rates for all residents.
Even though, the government has been trying, it still remains crucial for the government to assist in this regard by looking into mitigating the unemployment rate that is drastically increasing.
Red Force and City of Windhoek can also look into easing payment conditions through negotiations with the affected parties instead of blocking electricity and cutting off the water of the residents.
It is also equally important for the debt collectors to understand the difficult situation of the hardship individuals are facing, as the prices of the basic living needs has also drastically increased.
Therefore, it will be really fair, if RedForce approach the debt collection with the understanding that everyone is going through the current huge economic crisis and are making major adjustments to be able to afford the daily basic needs. Hence, Red Force need to engage the residents and draw up an amicable and affordable payment debt instead of cutting of the water and electricity.
* Author: Susana David
MBA: Public Sector Management Student
University of Namibia – Namibia Business School