Debt clouds Rundu’s N$485m proposed budget

The Rundu Town Council’s proposed N$485.5 million budget for the 2026/27 financial year is under mounting pressure, as the municipality continues to collect only 33% of its own revenue while its debt book has surged beyond N$665 million.

Presenting the proposed budget during a public consultation yesterday, the council’s head of finance, Sam Nekaro, outlined a sharply expanded spending framework, noting that the proposal represents a 57% increase from the N$309 046 165 approved for the 2025/26 financial year.

“The total proposed budget for the financial year 2026/27 is an amount of N$485 551 191", Nekaro said.

He explained that despite the significant increase, the budget remains heavily dependent on internal revenue sources.

He noted that 76% of the total income, amounting to N$372 095 491, is expected to be generated internally, while 14% will come from external sources such as the Road Fund Administration and the Ministry of Urban and Rural Development.

Internal revenue sources include rates and taxes, emergency service charges, property and land sales, rental of market stalls and the Rundu Trade Fair, building plan approvals, business registration fees, waste levies, refuse removal, sewerage charges and water sales.

However, Nekaro acknowledged that the municipality’s ability to collect this income remains severely constrained.

“Our revenue collection rate is low; it currently stands at 33%,” he said.

Nekaro said that out of approximately 18 000 Rundu account holders, only between 5 000 and 6 000 are actively paying their municipal accounts, describing this as a serious concern.

Rising debt

The weak collection rate has intensified pressure on the council’s financial position, reflected in a rapidly growing debt book.

“As at 31 March 2026, council’s debt book stood at an amount of N$665 758 668.59,” Nekaro said, adding that this represents an increase of N$169.4 million, or 34.1%, from the previous year.

Despite these challenges, nearly half of the budget has been allocated to capital projects, amounting to about 49% or N$238 million.

The capital expenditure plan includes major road infrastructure works such as N$64.7 million for tarring projects, N$30 million for storm water construction, N$2.5 million for gravelling and regravelling of roads, and N$3 million for a mechanical broom.

Additional projects include N$40 million for the construction of the RTC head office under technical services, N$2.5 million for electricity extension in Extension 8, and N$1.5 million for master plans covering sewer, water and electricity systems.

Under public and environmental health, the council has also allocated N$450 000 for skip containers, N$1.1 million for a skip truck, and N$400 000 for consultancy work on the design and costing of sand mining, new landfill and recycling sites.

On the expenditure side, 36% of the budget will go to general operating costs, 14% to salaries and wages, and only 3% to repairs and maintenance.

Residents must cooperate

Nekaro cautioned that implementation remains a major challenge.

“Implementation of capital projects is hindered greatly,” he said.

The combination of a significantly expanded budget, low revenue collection and a growing debt burden raises serious questions about the municipality’s ability to realistically implement its development plans.

Speaking at the consultation, Town Council acting CEO Sakaria Shopati said the budget consultation was held in line with the Local Authority Act No. 23 of 1992, which requires councils to engage communities in the budget process before finalisation. He said the purpose of the engagement was to ensure residents “buy into the budget” and understand planned interventions.

Shopati urged residents to support the council through consistent payment of municipal accounts.