The decision by Urban and Rural Development Minister James Sankwasa to direct municipalities to disconnect water and electricity services to government ministries, state-owned enterprises and large private companies that fail to settle outstanding municipal debts has ignited intense debate across the country.
On the surface, the directive appears both logical and overdue. Municipalities cannot continue to provide services indefinitely while carrying billions of dollars in unpaid debt. Local authorities rely heavily on revenue from rates, taxes, electricity and water payments to maintain roads, sanitation systems, waste management, public facilities and essential infrastructure. When major consumers fail to pay their bills, municipalities find themselves trapped in a cycle of financial distress that ultimately affects every resident.
The minister’s intervention therefore addresses a very real and longstanding problem.
Yet while the principle of accountability is difficult to dispute, the practical implementation of the directive reveals a far more complex challenge than a simple debtor-creditor relationship.
The first complexity lies within government itself. Many of the institutions reportedly owing municipalities are state entities funded through the national budget. In effect, one arm of government is being instructed to disconnect another arm of government. The result could be a situation where public hospitals, schools, police facilities, courts or other essential services face disruptions because of financial disputes between state institutions.
Such an outcome would be difficult to justify. Citizens who depend on these services should not become collateral damage in a battle over unpaid accounts.
The second challenge concerns the underlying causes of municipal debt. Not all arrears arise from deliberate refusal to pay. Some state entities operate under severe budget constraints and may have accumulated debts over several years due to funding shortfalls. Likewise, some private companies may be facing genuine financial difficulties stemming from economic downturns, declining demand or operational challenges.
This does not excuse non-payment, but it does suggest that blanket disconnections may not always represent the most effective solution.
A third consideration is the broader economic environment. Namibia continues to grapple with high unemployment, sluggish economic growth in several sectors and increasing pressure on both public and private finances. Large-scale service disconnections could have unintended consequences for investment, employment and service delivery.
If a major employer loses access to electricity or water, the impact may extend beyond management and shareholders. Workers, suppliers and surrounding communities could also feel the effects.
At the same time, municipalities themselves deserve greater scrutiny. Local authorities often point to unpaid debts as the primary source of their financial difficulties. While outstanding accounts undoubtedly represent a major challenge, many municipalities have also faced criticism over governance weaknesses, inefficient billing systems, poor debt collection practices and inadequate financial management.
Taxpayers and ratepayers are entitled to ask an important question: if all outstanding debts were collected tomorrow, would every municipality suddenly become financially sustainable?
The answer is unlikely to be that straightforward.
The municipal debt crisis therefore reflects deeper structural problems within local government financing. It is a symptom of a broader ecosystem in which national government, local authorities, state-owned enterprises and private businesses have become increasingly entangled in financial obligations that are often difficult to resolve.
This reality calls for a balanced approach.
The minister is correct to insist that municipalities cannot continue functioning as involuntary lenders to large institutions. The culture of non-payment, particularly among entities that possess the resources to meet their obligations, must come to an end. Accountability is essential for the sustainability of local government.However, enforcement should be accompanied by practical mechanisms that encourage resolution rather than simply punishment.
One possible solution would be the establishment of structured repayment agreements for major debtors. Instead of immediate disconnections, municipalities could negotiate binding payment plans with clear milestones and penalties for non-compliance. Such arrangements would allow municipalities to recover outstanding funds while ensuring continuity of essential services.Government could also consider creating an intergovernmental debt settlement framework specifically for public institutions. Where ministries and state-owned enterprises are involved, Treasury-led interventions may prove more effective than service disconnections. A coordinated national approach could help reconcile debts without disrupting public services.
For the private sector, differentiated treatment may be necessary. Companies that can demonstrate genuine financial hardship could be offered temporary repayment arrangements, while chronic defaulters who have the means to pay should face stricter enforcement measures.
Equally important is the need for municipalities to strengthen their own financial management systems. Accurate billing, transparent accounting, efficient debt collection and regular audits are essential if public confidence is to be restored. Residents and businesses are more likely to meet their obligations when they believe their payments are being managed responsibly and translated into visible service delivery.
The current controversy should therefore be viewed as an opportunity rather than merely a confrontation. It has exposed weaknesses that have existed for years but have often been ignored. The debt crisis is not solely a municipal problem, a government problem or a private sector problem. It is a national governance challenge that requires cooperation across all levels of society.
Minister Sankwasa’s directive has succeeded in drawing attention to an issue that can no longer be postponed. The next step, however, must move beyond threats and deadlines toward durable solutions.
Namibia’s municipalities need revenue to survive. Citizens need reliable services. Businesses need operational certainty. Government institutions need continuity. None of these objectives are mutually exclusive.
The ultimate goal should not be disconnection. It should be restoring a culture of payment, accountability and financial sustainability that ensures municipalities can fulfil their mandates while protecting the economic and social interests of the country as a whole.
