Windhoek handles 90% of debt internally, municipality says

The City of Windhoek says it handles more than 90% of its debt collection internally, with less than 10% outsourced to RedForce Debt Management, which has recovered over N$300 million on the municipality’s behalf.

In a statement last week, the City sought to correct what it called “misleading” claims of over-reliance on external agencies.

“Less than 10% of arrears, mostly in the 90- to 120-day category, are handed over to external collectors such as RedForce,” the municipality clarified. “Pensioner accounts, especially those under the debt relief programme, are rarely handed over.”

It added: "The City’s internal debt recovery unit handles over 90% of all collections, contrary to allegations of over-reliance on external parties."

RedForce has previously disclosed that it has recovered more than N$1 billion from ten local authorities nationwide since 2014, including over N$300 million for Windhoek.

The City said the arrangement is cost-effective because RedForce is paid only on actual amounts recovered, avoiding the fixed costs incurred under previous collection models.

The statement added that during the 2023/24 financial year, the municipality wrote off more than N$524 million in debt to ease the burden on residents, mainly pensioners and other qualifying customers.

However, it noted that some pensioners whose debts were previously cancelled have fallen back into arrears, collectively owing about N$20 million.



Procurement law compliance

The City further stressed that all contracts, including those with RedForce, are subject to the Public Procurement Act and cannot be terminated without just cause.

"It is important to stress that contracts, including that of RedForce, cannot be terminated arbitrarily without legal cause. Doing so would not only expose council to costly legal challenges, but also undermine institutional stability."

This clarification follows a recent directive from urban and rural development minister Sankwasa James Sankwasa, instructing all local authorities not to renew or sign agreements with RedForce.

The minister cited “economic and political challenges and problems” faced by residents, saying the company’s collection methods had “a very negative effect” on citizens.

Similarly, Katima Mulilo CEO Raphael Liswaniso has emphasised recently that all procurement-related matters, including debt collection contracts, fall under the Public Procurement Act, and that any directive conflicting with the Act would be unlawful.

A concerned citizen, however, on Friday questioned the logic of outsourcing such a small fraction of debts, arguing that if the City of Windhoek’s internal debt recovery department is handling 90% of debtors, "what is the use of sourcing the services of external debt collectors for merely 10%? Just remove RedForce and take over the remaining 10%.”



Support of the elderly

The City also refuted claims that it had not responded to residents’ concerns, saying it was “listening and responding”.

“Contrary to claims of inaction, the City of Windhoek has constantly engaged the public on the issue of debt collection and its relationship with RedForce,” the statement read.

It listed key engagements with residents and the media and underlined its commitment to supporting pensioners through ongoing targeted relief measures.

These include subsidised electricity, with the first 250 prepaid units per month sold at a discounted rate; subsidised or free municipal bus fares for registered pensioners and extended and flexible payment arrangements, among others.

“Additionally, Windhoek continues to offer some of the lowest municipal electricity tariffs in the country, even when compared to certain South African municipalities.”