Martin Endjala
The Namibia Power Utility (Nampower) refuses to write off the debts owed to it by the //Kharas region and Hardap region after the Deputy Leader and Member of Parliament of the Landless People’s Movement, Henny Seibeb tabled a motion in parliament calling for the writing off of debts.
Both //Kharas and Hardap regions owe Nampower over N$500 million, while the total debt owed to NamWater as at 31 March 2023 is N$1.718 billion.
Appearing before a Parliamentary Standing Committee on Human Resources and Community Development yesterday, Nampower’s Chief Financial Officer Michael Gotora adamantly stressed that Nampower would only write off the debts, provided that the debtors settle them.
“In writing off these debts, we are helping the recovery of the domestic economy, which is already strained due to the high and further escalating costs of living. We are further securing livelihoods, by releasing resources within the local authority system, to allow these institutions to begin small economically viable projects within their areas”, said Seibeb said.
Gotora however maintained that NamPower cannot afford to write off the debts as it would hurt its finances and harm its ability to consistently meet its mandate. The power utility’s debtors book stands at an unsustainably high amount of N$1.5 billion.
In addition, Gatora says that the company is experiencing an increasing rate of defaults since 2017 and some customer’s debts exceed three years.
He explained that the implication of the current situation could lead to an unreliable supply of power and will impact the sustainability of NamPower.
The outcome of engagements with local authorities concluded that the failure by customers to meet electricity payment obligations is partly due to Insufficient revenue generation by these localities to meet all service requirements, where most of them are simply not capable of operating their electricity distribution networks.
They also concluded that they lack the resources and technical skills, dilapidated infrastructure, high losses and electricity meter by-passes as well as poor governance and financial discipline within most local authorities.
NamPower will introduce pre-paid bulk metering systems and this initiative will help the industry in managing cash flows and alleviate the debt escalation problem.
However, the Chief Financial Officer stressed that it is absolutely necessary that they limit the escalation of debts and collect what is owed for the sustainability of the electricity supply industry.
He said that writing off debts owed to the utility is not a solution as this will influence other customers in good standing to also start defaulting on their obligations, adding that it sets a very bad precedent”.
Meanwhile, Namwater Operations Manager of Business Unit for Southern regions Franklin Kavita said that prepaid meters for bulk water supply to local authorities have seen significant advances in recent years.
These advances are aimed at improving efficiency, accuracy, and transparency in water management, billing, and revenue collection. Repayments structured 70 percent towards actual water and 30 percent applied to historic debt.
They also recommend investing in capacity building initiatives, were local authorities can build the necessary skills, knowledge, and infrastructure to overcome payment challenges. This ultimately leads to improved financial sustainability, efficient water management, and better service delivery for communities.
In addition, interest can be written off depending on the NamWater Board approval.
Kavita says that realistic repayment agreements provide a structured approach to address historic debt accumulated by local authorities and by establishing a repayment plan that considers the financial capacity of the authority, it will offer a viable path to gradually eliminate the outstanding debt over time.
The Former Keetmanshoop regional Councillor Gerrit Witbooi says that government needs to do away with the middle men such as the water and electricity utilities.
“Having having such middle men carrying out the mandates on behalf of government is what led to where we are today. Most of these debts are generational costs, meaning they were not caused by the communities but by government institutes. I therefore call on the Ministry of Urban rural and Development to up its game to take control of the affairs of local authorities,” Witbooi said.
Meanwhile, the LPM’s Rehoboth Councillor Harald Kambrunde on Wednesday said that residents have been paying their debts but their electricity and water is constantly cut off.
According to him, making arrangements with utility providers is pointless as they are not honoring them. He says he supports the writing off of debts, adding that it will help alleviate the suppressed economic pockets of the people who are already finding it hard to make ends meet.
Popular Democratic Movement Chief Whip Elma Dienda reiterated that as a standing committee, they will make sure that the motion is properly consulted and that they will get the views of the affected communities to draft up a report to submit to parliament.
Dienda who is also in support of Seibeb’s motion said she believes that the writing off of debts will not only uplift the livelihoods of the people but it is a moral responsibility of the government to do so, in terms of social development and economical sustainability of communities.
