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Editorial - City wage bill is the problem

2021-08-27  Staff Reporter

Editorial - City wage bill is the problem

So, the City of Windhoek has resorted to lump residents with tariff increases as the council’s expenses, including a N$1.5 billion wage bill, continue to put pressure on its limited resources. 

This week, the city publicly announced its N$4.5 billion budget for the current financial year. The numbers are unspeakable. Salaries and wages make up the bulk of the wage bill at N$785 million, followed by housing allowances at N$268 million, the medical aid fund at N$138 million, and N$137 million for pension contributions. Acting CEO George Mayumbelo said although the wage bill represents 35% of its budget, the city only has 2 535 staff, of whom 1 920 are permanent, 615 temporary, 422 City Police employees and 446 interns. 

Unfortunately, ordinary residents now have to bear the brunt of tariff increases to enable the city to handsomely pay its executives and town councilors, who rake in more than N$50 000 in monthly allowances alone. 

If the city gets its way, and pending approval from the Electricity Control Board, Windhoek residents will pay 3.7% more for electricity, while a 5% household refuse tariff has been proposed. 

Pleasantly, the city fathers have decided not to increase tariffs for water and sewerage during the current financial year. There is no doubt that like many local authorities, the City of Windhoek included, have been hard hit by the economic impact of the Covid-19 pandemic.  

Last year, urban and rural development minister Erastus Uutoni directed all local authorities and regional councils to put on hold any proposed tariff increases in light of the devastating effect of the virulent pandemic. 

We have also seen local and regional authorities coming to the aid of residents by supplying them with free water during the early stages of the pandemic. Of course, it goes without saying that the local authorities are finding themselves in a financial squeeze and the only way they can possibly get out of it is by considering increasing tariffs. 

On the other hand, ordinary citizens are finding the going tough and already have so little cash to spare after the coronavirus crisis ravaged the economy. 

Thousands have lost jobs, while trade restrictions introduced as part of the public health regulations have eaten big time into the informal sector. We, therefore, agree with economist Omu Kakujaha-Matundu, who opined recently that the city should rather consider cutting its own costs before hiking tariffs and placing any burden on residents. 

We are in total concurrence that the hiking of rates may not be productive, as it could lead to higher default rates, which could ultimately result in lower revenue for the municipality. The economic ripple effects of the Covid-19 pandemic are still being felt on the ground, while many households are still struggling to make ends meet. 

It is also unfortunate that the exorbitant tariff increases are not being accompanied by a marked improved service on the part of the city. Municipal services continue to deteriorate, while consumers are forced to pay more for less. This is not on.

2021-08-27  Staff Reporter

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