RedForce loses foothold in municipal debt collection

The expiry of RedForce Debt Management's contract with the City of Windhoek has widened a national shift away from outsourced municipal debt collection, with several local authorities allowing agreements to lapse and choosing not to renew them.

Windhoek's agreement ended on 31 July following the expiry of the original contract in July 2025 and the completion of its one-year exit period.

The City has not appointed another external debt collector and will instead rely on its debt and risk management division to recover about N$845 million in outstanding municipal accounts while council considers its long-term approach.

"Any developments regarding future debt collection arrangements will be communicated once Council has made a decision," City spokesperson Lydia Amutenya said.

The Khomas Rate Payers and Residents Association last week urged members not to enter into new payment arrangements with RedForce.

“We are unable to help those who go and make arrangements they can’t keep up with,” the association said.

Court battles

Although Windhoek has returned debt collection to its own officials, RedForce continues to operate in some towns due to court orders.

In Walvis Bay, RedForce was appointed in 2023 to collect municipal arrears.

According to an affidavit filed in the High Court, the municipality initially handed over 10 288 accounts with a combined debt book of N$337.32 million.

By April 2024, RedForce said it had recovered between N$80 million and N$85 million, invested N$7.5 million in its Walvis Bay operation and employed 27 people.

The municipal council voted on 23 April 2024 to terminate the company's services with immediate effect, but RedForce approached the High Court, which halted implementation of the council resolution pending determination of the main dispute.

A similar dispute unfolded at Henties Bay, where, according to court records, RedForce collected more than N$43 million between February 2022 and September 2024 after receiving 2 124 accounts with arrears of approximately N$54.8 million.

When Henties Bay attempted to terminate the agreement in October 2024, RedForce obtained a High Court order preventing the municipality from doing so until the contractual dispute-resolution process had been completed.

Some still back RedForce

Grootfontein, meanwhile, signed a five-year agreement with RedForce on 5 April 2024 to collect more than N$213 million in outstanding debt.

Acting chief executive Indileni Lungameni told Namibian Sun last year that the municipality's financial position had improved significantly since RedForce was appointed.

Ondangwa town council spokesperson Petrina Shitalangaho-Mutikisha previously told Namibian Sun that RedForce had recovered more than N$33 million in the 10 months to November 2023. The municipality had previously reported an outstanding debt book of about N$85 million.

RedForce's five-year contract with Katima Mulilo, signed in July 2021 to recover about N$145 million from more than 3 000 municipal accounts, was set to expire on 30 June this year. However, the council has not publicly announced whether it was renewed or allowed to lapse.

Oshakati's contract ended in June 2024, after which debt collection returned to the municipality's finance department.

Outapi's agreement also ended after running from January 2020 to December 2021.

Keetmanshoop likewise allowed its two-year agreement to lapse and did not renew it.

The contract lapse was followed by litigation, with RedForce instituting High Court proceedings seeking payment of approximately N$1.6 million and N$1.8 million, together with interest.

In its defence, the municipality said it had already paid RedForce more than N$2.9 million and alleged that its debtors' book increased by 21% during the collection period.

The High Court upheld the municipality's special plea that the dispute first had to follow the contract's dispute-resolution procedure before litigation could continue.

The first High Court judgment to consider the merits against RedForce involved the Rundu council.

Appointed in August 2020, the company was required to recover N$5 million a month.

The High Court found RedForce repeatedly failed to meet that contractual target before terminating the agreement and later suing the council for N$9.2 million, comprising N$5.1 million in alleged lost debt-collection income and N$4.1 million in alleged lost data-collection income.

Judge Orben Sibeya dismissed the claim and ordered RedForce to pay the council's legal costs.

Minister steps in

On 4 August 2025, urban and rural development minister James Sankwasa intervened, directing municipalities and town councils not to renew RedForce contracts upon their expiration.

He said the company had caused "many economic and political challenges and problems" for residents in local authorities where it operated.

"All local authorities which have existing contracts with RedForce are hereby directed not to renew such agreements at the expiry date. Those which have not yet entered into an agreement with RedForce are equally directed not to do so," Sankwasa said.

RedForce responded by approaching the High Court to have the directive reviewed and declared unconstitutional.

In an affidavit, co-owner Selma Nangombe said the directive would deprive the company of its right to conduct business and eliminate most of its operations.

"The aim with the directive is to destroy RedForce and if allowed to stand, that is exactly what the result will be,” RedForce argued.