Govt to review CEO pay at local authorities

Government is set to review salary structures for chief executive officers across local authorities to determine whether they comply with legally prescribed limits, the Ministry of Urban and Rural Development has said.

Speaking to Namibian Sun this week, minister James Sankwasa said the review is in line with the Public Enterprises Governance Act, which regulates remuneration for entities classified as public enterprises.

Sankwasa said government is now assessing whether CEOs across local authorities are being paid in line with the approved framework.

“There is a certain quantile percentage that is allowed by the law, but a lot of institutions of government have gone beyond what is allowed. That is the problem,” he said.

“That’s something that we are looking into. To review the salaries, whether the CEOs all over Namibia are paid according to the quantile that is determined or not.”

Position, not performance

Sankwasa was responding to concerns amid questions over the criteria used to structure salary grades for local authority CEOs, with significant variations reported between institutions.

Some chief executives are understood to earn significantly higher packages than others, raising public debate over fairness and consistency in the system.

This has also fuelled broader discussion around performance incentives, with suggestions that remuneration levels could influence efficiency and service delivery outcomes in local authorities.

The minister stressed that salaries are tied to the position and not prior performance.

“In Namibia, we don’t have performance-based remuneration. We have position-based remuneration,” he said.

Sankwasa explained that salary structures also differ depending on the classification of local authorities.

“There are packages that have been determined by government, based on the level of the particular town council, whether it’s a village council, a town council or a municipality,” he said.

He added that municipalities largely generate their own revenue, unlike other councils that depend more on central government support, but their remuneration still remains subject to regulation.

He said while municipalities manage their own finances, "their remuneration must still be regulated by the ministry.”

Sankwasa said inconsistencies identified within the system have prompted the current review.

Consistency and fairness

Weighing in on the matter, political analyst Dr Ndumba Kamwanyah said while full standardisation of salaries across all local authorities may not be practical, a balanced approach is needed.

“In my view, salaries should not be fully standardised across all local authorities," he noted.

"While some level of consistency is important and needed for fairness and transparency, different councils face different realities."

Factors like the size of the town, budget, population, cost of living and level of responsibility should be considered, he added.

Kamwanyah said national guidelines are still necessary to prevent wide disparities.

“However, there should be clear national guidelines to avoid large and unfair gaps. This can help balance fairness with flexibility,” he explained.