The total debt owed to Otavi town council for municipal services stood at N$57.6 million as of 6 September 2022. 

This is an increase of 19.6% from the N$48.2 million owed during the financial year 2020/2021.

Otavi CEO Sakaria Haulofu said as with most local authorities across the country, the issue of debt collection because of poor payment patterns by different consumers and customers remains a challenge. 

On water and other municipal services, Haulofu indicated the biggest defaulters are the residential consumers. When combined, they make up the largest share of the total debt owed to the council. 

According to him, there are a few government offices, ministries, and agencies that owe the council but they eventually pay over time. 

Regarding rates and taxes, the council stressed the biggest defaulters are mostly owners of unimproved (empty) erven with no connected municipal services. 

Other defaulters Haulofu mentioned include the owners of townlands, which are farms and other institutions such as factories and mines within the boundaries of the town. 

However, he assured the council has a credit and debt management policy, which is used to ensure effective and efficient debt management. 

“Non-adherence to proper credit management can result in serious cash flow problems for the council and that will affect the operations of the council negatively. As a means to ensure that these defaulters do honour their monthly bills, the council has resolved to not issue clearance certificates whenever these properties are being sold or transferred,” he remarked.

Council has over the past year increased the accuracy of data collected to ensure a correct billing process; a timely preparation of accounts that ensure that every consumer and customer receives their accounts on time to ensure a steady payment and flow of revenue.

Further, Otavi has updated its client information and acquired a dedicated telephone number and mobile phone for the sole purpose of constantly calling clients to remind them to pay before the due date.

Council has also entered into payment agreements with clients that owe council huge amounts to set up payment plans on their outstanding debt. 

These agreements range between three to six months and are constantly monitored with the defaulters risking their services being discontinued immediately. 

 Haulofu said the council disconnects water services to clients that are constantly defaulting on their payments. 

“This is a very effective method because it targets the most basic service that is important to the client. Council can also refuse to approve business registration /renewal, building plan approvals as well as other statutory documents or requirements if a client owes the municipality. Through our community meetings organised by the local authority councillors, consumers are educated about the importance of paying for municipal services,” he added.

Sourcing the services of an external debt collector and or attaching the properties of the defaulters is another recovery measure Otavi has mooted.

- anakale@nepc.com.na