Aranos's annual budget cut, staff pay hikes declined
The Aranos Town Council’s proposed budget of N$131 326 020 for the period from 1 July 2025 to 30 June 2026 has been reduced by N$12 783 962 and approved at N$118 542 058, subject to a number of conditions.
The decision was confirmed in a letter to the town council’s chief executive officer, Gerson Tjitaura, from the executive director of the urban and rural development ministry, Wilhelmine Shivute.
Shivute said the budget was reviewed in terms of the Local Authorities Act, 1992 (Act No. 23 of 1992), as amended, as well as relevant council resolutions. Following the review, the ministry approved the revised budget subject to specified conditions.
The ministry urged the council to comply with directives set out in the budget circular dated 24 March 2025, particularly on submitting budgets within prescribed timeframes and ensuring that future estimates are realistic and carefully prepared.
Budget oversight
On capital funding, the letter outlined allocations from central government and statutory agencies. These include N$2 500 000 for the construction of an indoor SF6 Panel 11 kV substation, N$740 000 for the procurement of a vehicle, and N$1 147 300 from the Road Fund Administration for road maintenance.
The ministry stressed that the funds must be used strictly for their intended purposes.
In the revised budget, capital funding was reduced by N$9 375 000 linked to the procurement, installation and commissioning of prepaid water and electricity metering systems.
The ministry noted that funds for prepaid water meters have already been deposited into NamWater’s bank account for joint procurement, while N$3 435 000 for prepaid electricity meters has been paid into the council’s account.
Council was cautioned not to overcommit government funds and to ensure that all projects remain within approved financial limits, especially after settling outstanding invoices from the previous financial year.
The ministry advised that a supplementary budget should be submitted should additional envisaged funds be secured.
Staff budget
On staff pay raises, the ministry did not approve proposed salary increases of between 8.56% and 84.02% for staff for the 2025/2026 financial year.
The decision was made in light of the prevailing economic conditions and the financial pressures faced by residents.
The letter states that any future requests for salary increases must be supported by evidence of sound debt management, improved revenue collection and the ability to implement such increases without raising tariffs.
Reference was made to existing financial pressures, including outstanding debts to NamWater and expenditure on salaries, wages and allowances.
The ministry also provided guidance on allowances.
Airtime allowances for councillors must align with amounts approved by the minister, while car allowances must comply with the approvals issued in September 2024, set at N$123 633 per year.
In addition, overtime expenditure for the 2025/2026 financial year must be capped at N$418 849, representing 2.5% of personnel costs, in line with ministry guidelines.
Settle debts
Further directives included the requirement for prior written ministerial approval for grants, donations and bursaries, as well as a strong call to avoid uneconomical entertainment and travel expenditure.
Council was advised to prioritise the payment of basic services such as water and electricity, make adequate provision to settle outstanding debts to NamWater and NamPower and comply with the statutory obligation to pay the 5% levy of rates and taxes to the Hardap Regional Council.
Finally, the ministry stressed the importance of implementing all approved capital projects within the budgeted period and submitting quarterly progress reports.
Any challenges affecting project implementation must be communicated to the ministry in a timely manner to allow for appropriate intervention.
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The decision was confirmed in a letter to the town council’s chief executive officer, Gerson Tjitaura, from the executive director of the urban and rural development ministry, Wilhelmine Shivute.
Shivute said the budget was reviewed in terms of the Local Authorities Act, 1992 (Act No. 23 of 1992), as amended, as well as relevant council resolutions. Following the review, the ministry approved the revised budget subject to specified conditions.
The ministry urged the council to comply with directives set out in the budget circular dated 24 March 2025, particularly on submitting budgets within prescribed timeframes and ensuring that future estimates are realistic and carefully prepared.
Budget oversight
On capital funding, the letter outlined allocations from central government and statutory agencies. These include N$2 500 000 for the construction of an indoor SF6 Panel 11 kV substation, N$740 000 for the procurement of a vehicle, and N$1 147 300 from the Road Fund Administration for road maintenance.
The ministry stressed that the funds must be used strictly for their intended purposes.
In the revised budget, capital funding was reduced by N$9 375 000 linked to the procurement, installation and commissioning of prepaid water and electricity metering systems.
The ministry noted that funds for prepaid water meters have already been deposited into NamWater’s bank account for joint procurement, while N$3 435 000 for prepaid electricity meters has been paid into the council’s account.
Council was cautioned not to overcommit government funds and to ensure that all projects remain within approved financial limits, especially after settling outstanding invoices from the previous financial year.
The ministry advised that a supplementary budget should be submitted should additional envisaged funds be secured.
Staff budget
On staff pay raises, the ministry did not approve proposed salary increases of between 8.56% and 84.02% for staff for the 2025/2026 financial year.
The decision was made in light of the prevailing economic conditions and the financial pressures faced by residents.
The letter states that any future requests for salary increases must be supported by evidence of sound debt management, improved revenue collection and the ability to implement such increases without raising tariffs.
Reference was made to existing financial pressures, including outstanding debts to NamWater and expenditure on salaries, wages and allowances.
The ministry also provided guidance on allowances.
Airtime allowances for councillors must align with amounts approved by the minister, while car allowances must comply with the approvals issued in September 2024, set at N$123 633 per year.
In addition, overtime expenditure for the 2025/2026 financial year must be capped at N$418 849, representing 2.5% of personnel costs, in line with ministry guidelines.
Settle debts
Further directives included the requirement for prior written ministerial approval for grants, donations and bursaries, as well as a strong call to avoid uneconomical entertainment and travel expenditure.
Council was advised to prioritise the payment of basic services such as water and electricity, make adequate provision to settle outstanding debts to NamWater and NamPower and comply with the statutory obligation to pay the 5% levy of rates and taxes to the Hardap Regional Council.
Finally, the ministry stressed the importance of implementing all approved capital projects within the budgeted period and submitting quarterly progress reports.
Any challenges affecting project implementation must be communicated to the ministry in a timely manner to allow for appropriate intervention.
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