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Otavi enters payment deals with debt defaulters

2022-09-29  Albertina Nakale

Otavi enters payment deals with debt defaulters

The Otavi town council has entered into payment arrangements with clients who owe it huge amounts to set up payment plans on their outstanding debt. 

Otavi mayor Isaac Hoaeb said this agreement ranges between three and six months – and it is constantly monitored with the defaulters risking their services to be discontinued immediately. 

As with most local authorities across the country, the issue of debt collection is due to poor payment patterns by the different consumers and customers of the town council. 

The total debt owed to the council stands at N$57 574 144.06 as of 6 September 2022. 

This amount is an increase of 19.6% from the N$48 154 760.85 of the 2020/2021 financial year.

The town council plans to source the services of an external debt collector and/or attach the properties of the defaulters.

“The one single defaulter is the Ohorongo Cement Mine, which owes the council a total of N$12 629 766.20. That is over 20% of the total debts owed. The biggest defaulters are the residential consumers; when combined, they make up the largest share of the total debt owed to the council. There are a few OMAs [offices, ministries and agencies] that owe council but they eventually, overtime, pay – not just on a  frequent basis” he maintained. 

 According to him, the biggest defaulters are mostly owners of unimproved (empty) erven that are not connected to municipal services. 

He pointed out that the owners of townlands are farms and other institutions, such as factories and the Ohorongo Cement mines within the boundaries of the town. 

Otavi town 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 council negatively. 

Therefore, council has resorted to some debt collection measures. 

These means include ensuring these defaulters honour their monthly bills.

 Council has resolved not to issue clearance certificates whenever these properties are being sold or transferred. 

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

 Moreover, council 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.

 Hoaeb mentioned Otavi 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,” he said.

 Council can also refuse to approve business registration or renewal, building plan approvals as well as other statutory documents or requirements if a client owes the municipality.

 Through community meetings, organised by the local authority councillors, he highlighted consumers are educated about the importance of paying for municipal services.

On waste management, the Otavi town council has a controlled waste management system in which all residents in formal settlements are issued with wheelie bins. 

There is a weekly schedule on which the dust bins are collected in different locations within the town by means of a compactor truck. 

“In our informal settlements, we have identified mini dumping sites and placed skip containers where such waste is removed by means of using a front-end loader and tipper truck. The council charges the residents as per gazetted tariffs that reflect on their municipal bill for waste removal, and there are fines for illegal dumping. The council organises bi-monthly community clean-up campaigns that mostly focus on picking up litter within the town,” he said. 


2022-09-29  Albertina Nakale

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