Grootfontein eyes external debt collectors…municipality owed over N$130m

Despite the primary mandate of city councils to provide essential services to residents, many cities continue to face financial difficulties as these municipalities are crippled by huge debts due to non-payment of services.

These huge municipal arrears run into millions of dollars, and calls have been made, especially by politicians, to cancel these bad debts.

Grootfontein in the Otjozondjupa region is one of those towns affected by the huge debt due to non-payment of municipal bills.

They are working hard to erase the more than 130 million Namibian dollars of debt accumulated over 10 years.

Residents’ debt is seen as derailing the council’s efforts to speed up service delivery due to a lack of revenue. Over the years, the municipality has called on residents to pay their municipal bills, or deal with water cuts as the council struggles to provide adequate services.

As a positive gesture, the city provided free water to poor communities.

However, this generosity has come to haunt his operations.

Therefore, in an attempt to recover the money owed to it, the council proposed bringing in external debt collectors to pursue the defaulters.

Grootfontein Municipality spokesman Luke Salomo said disconnecting the water was the last resort, if the public did not heed the council’s call to settle scores.

“It is completely unacceptable that some residents, businesses and institutions want to take advantage of the privilege of having water when they owe such amounts to the council. The other arrangement is for the council to consider setting up a debt collection agency to collect some of the funds owed to the council,” he noted.

The Council said the culprits are cross-cutting, ranging from ministries to local businesses and residents.

“There is a new trend in our country, where some people just want free stuff. Old habits of non-payment must end. If the council starts providing free services, it will be unable to fulfill its responsibilities. The user-pays principle must be respected at all times. Money is like blood in the body. If there is no blood in your body, you die. The same goes for the municipality, because it will cease to fulfill its mandate,” Salomo stressed.

Likewise, he mentioned that some of the biggest culprits are residents residing in singles neighborhoods and those living in informal settlements.

The other group of defaulters he identified are people renting properties from the council, and the final group are developers who have been given land for development but have not paid their dues in full.

“The people of Grootfontein owe the council more than 130 million Namibian dollars. The current debt does not accurately reflect what people owe because the debts have accrued interest over the years. It is safe to say that much of the debt was inherited from the old regime at independence,” Salomo explained.

The chair of the Grootfontein management committee, Elizabeth Kastoor, recently said New era that the outstanding debt on tariffs and taxes has accumulated over a period of 10 to 15 years.

As a mitigating measure and once approved by the Minister of Urban and Rural Development Erastus Uutoni, the council resolved a dollar-to-dollar system, where it will write off a dollar for every dollar paid.

“The council is also in the process of introducing prepaid water meters,” she noted.

Kastoor clarified that Grootfontein has no debt from NamPower because the city council uses Cenored prepaid electricity.

Likewise, the council does not owe NamWater, as Grootfontein has its boreholes to supply drinking water to its inhabitants.

The Council therefore launched an appeal to the residents to go and make the necessary arrangements to settle their arrears.

The council does not charge accrued interest on residents’ unpaid bill debt. This means what you owe is what you pay.

“The good news is that plans are underway to try to consider canceling seniors’ debt in the near future. However, these decisions are dependent on the availability of funds and affordability. The good news is that some of our best clients are seniors, despite the important responsibilities they hold,” said Salomo.

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2022-09-29 Albertine Nakale