Hertta-Maria Amutenja
Households owned by pensioners in the City of Windhoek (CoW) owe the municipality a total of N$255 million in unpaid rates and taxes.
The outstanding amount is part of the total amount of N$1.2 billion owed by residents to the city.
This was revealed by Abel Isaaks, who works in the city’s finance department
This comes in the wake of a protest by the Katutura Residents’ Committee (KRC) outside the city’s offices, who demanded swift action from both the city management and the Minister of Urban and Rural Development, Erastus Uutoni, regarding their grievances over the use of Redforce Debt Management for debt collection.
Deputy Mayor Magdalena Lombardt, while addressing the matter indicated that the city is actively working on a proposal to write off debt for pensioners and interest rates for all residents. She however emphasised the need for caution in executing this process to ensure long-term financial sustainability.
Last week, during a protest, the residents’ committee led by Chairperson Benestus Kandundu, expressed dissatisfaction with the city’s approach to debt collection.
Lombardt pointed out that the city is obligated to follow legal mandates such as the Prescription Act and interest charges as per the Local Authorities Act, making it unable to freeze interest on arrears.
“We cannot freeze interest on arrears, and I urge the public to familiarise themselves with the relevant amendments. However, for pensioners’ payment arrangements, a principal decision was taken by the city to charge only a 15 percent down payment instead of the 33.33 percent requirement as per the city’s Credit Control Policy,” she said.
She said the city has the mandate to suspend pre-paid services to recover outstanding debts for various services rendered in accordance with the amended Electricity Regulation 20. Additionally, the introduction of pre-paid electricity and water meters has faced challenges due to financial constraints and limited manpower.
“It is important to note that the electricity pre-paid installations have always been free for pensioners. However, the only requirement is that the pensioners apply for the installation of pre-paid electricity meters. As for the pre-paid water meters, there are currently payment options available to pensioners and general residents, which are upfront payments or repayment of the pre-paid meter installation cost, over a maximum period of five years, deducted through the purchase of the unit at an interest rate of 11 percent,” she said.
In addition to addressing debt collection, residents also called for the immediate termination of Redforce’s contract and the introduction of prepaid electricity and water meter systems to eliminate the need for a debt collector.
Regarding ending the contract with Redforce, Lombardt explained that while the City charges 20 percent per annum on arrears, Redforce charges only 10 percent on amounts paid, and before Redforce’s appointment, clients’ accounts were handed over to attorneys for further debt collection.
“Those accounts handed over for legal collection to external attorneys accumulated vast amounts of debt, which placed a significant financial burden on the city and the clients since the attorneys charged legal fees even if they had not collected the amount from the defaulters. Whereas Redforce claims only 10 percent on actual payment received by the Council. The previous collection process proved to be costly, with no surety of financial benefit to the city or the client,” she said.
Moreover, Lombardt emphasised that no pensioners’ residential property accounts are handed over to Redforce, and there is no interest charged on accounts handed over to Redforce for all residents, apart from the collection fee of 10 percent of each payment made.
