NamWater revenue increased by N$52 million from N$1.624 billion to N$1.677 billion in the 2019/20 financial year, representing an increase of 3.2%. According to the corporation’s CEO, Abraham Nehemia, the overall financial strength of the corporation increased year-on-year, as the net equity position improved by 7%. This was on the back of an increase in assets by 2% and a reduction in liabilities by 0.2%.
“The consistent revenue generation, along with robust expense deployment strategies, has allowed the corporation to deploy further capital towards capital infrastructure, as net current assets increased by 25%, compared to the previous financial year,” he stated in the 2019/20 integrated annual report.
Although the recent drought years were a prevalent factor, Nehemia said various initiatives assisted NamWater to reduce its overall funding gap.
At the end of the reporting year, the corporation reported an operating profit margin of 4%, compared to a budgeted deficit margin of -0.2%. This was driven by higher water sales to the City of Windhoek towards the end of the year and under-expenditure on most of the cost elements.
During the reporting year, NamWater supplied 135 million cubic metres of water to its customers, which is 9.6% less than the previous reporting year when 142 million cubic metres of water were supplied. This was due to the recent drought experienced when less water was available in dams.
Nehemia continued that Namwater experienced some challenges during the financial year, stating that water demand still exceeds the supply.
“In the coming financial year, critical reservoirs will be identified, for which water levels and incidents of crucial shortages will be tracked. Also, attention will be directed to the execution of priority infrastructure projects,” he outlined.
Furthermore, he said the Covid-19 pandemic impacted the corporation through a chain of economic challenges, whose origins lie in the job market as Namibians lose employment and income, affecting their ability to pay for basic services, with access to water being the most crucial.
As a result, Hehemia said NamWater has been forced to “open the taps” to ensure the continuation of the water supply to the country, even though many local authorities have been slow or unable to pay for water as they struggle to exact payment from customers. This situation is expected to hit the corporation particularly hard during the coming financial year.
“The economic challenges and impact on the job market due to ongoing restrictions associated with the pandemic will exacerbate the financial position of local authorities even further, whose effect will in turn impact on NamWater’s revenue collection,” Nehemia explained.