Pricilla Mukokobi 

Isai Sipunga

The City of Windhoek is working on a proposal to write off debt for about 20 000 pensioners, who owe the City close to N$225 million. The proposed write-off is expected to include interest owed by all residents. 

However, this process will be executed cautiously to ensure long-term sustainability, the municipality said on Tuesday in response to a petition by the Katutura Residents Committee.

Responding to their cries, deputy mayor Magdalena Lombardt warned that this process must be executed cautiously to ensure long-term sustainability. 

The City has lately been fighting tooth and nail to get its books in order, and defiant residents are not making it any easier.

As of May 2023, the City was owed a staggering N$1.2 billion.

Despite numerous challenges, the City is actively pursuing assisting its residents, even though debts are becoming unsustainable. 

This, City officials said, is
making it difficult for the municipality to deliver uninterrupted municipal services to clients and customers. 

“We are actively considering various debt management modalities and are bound by legal mandates. Therefore, we cannot freeze interest on arrears. However, for pensioners’ payment arrangements, a principal decision was taken by the City to charge only a 15% down-payment, instead of the 33.33% requirement as per the City’s Credit Control Policy,” she stated.

This figure led the municipality to start disconnecting its services for accounts in arrears for 30 days and older.

Many homes, especially in Katutura, went dark between June and July 2023, an action that did not sit well with residents.

The deputy mayor added that the City has the mandate to suspend prepaid services to recover outstanding debts for various services rendered.

“It is important to note that the electricity prepaid installations have always been free for pensioners. However, the only requirement is that the pensioners apply for the installation of prepaid electricity meters.  “As for the prepaid water meters, there are currently payment options available to pensioners and general residents, which are upfront payments or payment of repayment of the prepaid meter installation cost over a maximum period of five years, deducted through the purchase of the unit at an interest rate of 11%,” Lombardt said.

The deputy mayor further showed her concern about non-pensioner residents who use situations such as this to petition and rally support whilst being in arrears themselves and who shy away from obligations to pay for what they use. 

Therefore, Lombardt assured that such cases, including repeated re-connections of defaulters’ services, will be thoroughly investigated and addressed.

“It should be noted that no pensioners’ residential properties accounts are handed over to RedForce and that there is no interest charged on accounts handed over to RedForce for all residents, apart from the collection fee of 10% of each payment made,” she explained.

On the matter of residents demanding that the City ends its agreement with RedForce, the deputy mayor said the City charges 20% per annum on arrears, while RedForce charges 10% on amounts paid. Prior to the appointment of RedForce, clients’ accounts were handed over to attorneys for further debt collection. 

“Those accounts, handed over for legal collection to external attorneys, accumulated vast amounts of debt, which placed a significant financial burden on the City and the clients, since the attorneys charged legal fees, even if they had not collected the amount from the defaulters, whereas RedForce claims only 10% on actual payment received by council,” Lombardt explained.

“The previous collection process proved to be costly, with no surety of financial benefit to the City or the client. Thus, the appointment of RedForce to collect debts on behalf of the City, was deemed
more financially viable,” she said. 

Lombardt said the City is committed to a thorough, policy-driven approach and will not be rushed into hasty decisions.

 “Therefore, I kindly ask for our residents’ patience as we conduct the necessary due diligence in line with our approval processes, which we hope to conclude by the end of October 2023,” she said.