Staff Reporter
THE City of Windhoek, on 7 November 2023, presented their budget for the 2023/24 financial year in which the council said that the budget has grown to N$5 billion which is evidence of the growth of the city compared to N$4.3 billion in 2022.
Joseph Uapingene, Mayor of the City of Windhoek, said that several interventions were also identified during the last quarter by way of mitigating some of the constraints faced by the City.
“The 2023/2024 Budget focuses on the efficiency of service delivery with the Capital budget focusing on infrastructure maintenance and creating additional infrastructure in the areas of water and electricity, to cater to the demands of the growing city. The budget also makes significant provisions to ensure that our land delivery & Council housing objectives are met. On the operational side, we proposed to the minister, a Capital expenditure budget of N$513 million of which N$507 million was approved. approximately N$460 million is allocated towards projects under infrastructure and housing,” Uapingene said.
The mayor further expressed concern about the alarmingly slow rate of execution against their budget which was further exacerbated by the cash flow constraints. He added that the Finance Department is looking at the Debt Book which currently stands at N$1.2 billion as at 31 October 2023, of which N$963 million is in arrears.
It was noted that the city had a N$700 million capital projects budget last year. However the execution projects were low due to cash flow constraints on the back of debt and low money collection.
“The exercise seeks to identify the long outstanding debts that are assessed as not collectable. Thereafter recommendations for the appropriate measures to clear the debt will be made, one of which is to consider incentives that encourage residents to pay their debts and thereby relieve the City and residents of the current debt,” the mayor said.
Also speaking at the budget launch, Jennifer Comalie, Strategic Executive for Finance and Customer Services at the City of Windhoek said that the city from 2020 to 2022 accumulated bad debt due to the Covid-19 crisis. “In 2020, we opened all accounts, even those which were closed. Free water was provided to informal settlement. A total of N$110 million is owed by the line ministry for this free water debt. In 2023, that 1.2 billion water debt is inclusive of the 110 million owed by the line ministry. For two years we did almost no disconnections. Covid has led to an increase in unemployment and reduction in disposable income, due to inflation. This has put pressure on servicing municipal debt. We are looking at how debt can be collected, and relieve as to how some residents can be assisted,” Comalie said.
She added that currently, the expenditure approved for the 2023/24 financial year is N$4.8 billion of which a bulk of it taken up by paying for expenses such as water and electricity sourced from NamPower (38%) and NamWater (18%). A total of 32% of the budget is allocated to staff and other payments.
Comalie shared that the City of Windhoek has liabilities, N$2.9 billion which includes current debts and a 15.6 billion net asset base. “We have a strong balance sheet. However, we have cash flow management issues. When a bank looks at our balance sheet, what is the possibility of asset sales? Our challenge for us is cash flow management. Security over the balance sheet, and selling assets in terms of default is cumbersome. The assets are very specific,” Comalie said.
She concluded management will continue to look at assets of council and see how they can unlock efficiency, as there are challenges due to the growing city and more demand for service delivery.
Leave a Reply