The rise of selective compliance

The recent High Court ruling against the City of Windhoek, preventing it from suspending electricity supply to recover unpaid water bills and other municipal arrears, has been widely interpreted as a victory for regulatory clarity and consumer protection. While that interpretation is legally sound, it risks obscuring a far more serious consequence: the gradual dismantling of municipal revenue enforcement in Namibia.

At the centre of this issue is the Electricity Control Board (ECB), a regulator with a clear and narrow mandate over electricity. Its directive—now reinforced by the court—prohibits local authorities from using electricity supply as leverage to recover debts unrelated to electricity, such as water, rates, and taxes.

From a legal standpoint, this position is defensible.

From an operational standpoint, it is destabilising.

Local authorities are not single-service utilities. They are integrated institutions responsible for delivering a broad suite of services—electricity, water, sanitation, roads, refuse collection, and the administration of rates and taxes. These services are funded through a consolidated revenue model, where financial sustainability depends not only on billing but on effective enforcement across the entire service basket.

The ruling effectively dismantles that enforcement model.

By limiting enforcement strictly to service-specific debt, municipalities are now compelled to unbundle their revenue and debt structures. Electricity can only enforce electricity; water can only enforce water; rates and taxes must stand alone.

The immediate consequence is behavioural.

Consumers, acting rationally, will prioritise services with immediate and visible consequences—most notably electricity. With electricity already largely prepaid, and water increasingly transitioning to prepaid systems, the ability of municipalities to enforce payment for rates, taxes, and other levies—the largest components of municipal debt—is effectively eliminated.

This creates a predictable outcome: selective compliance.

Residents will keep their lights on and their water flowing while allowing rates and taxes to accumulate. Over time, this will result in a sharp increase in defaulters, particularly in the categories of debt that are already the most difficult to collect.

Traditionally, municipalities could respond through legal enforcement, including the attachment of property. However, this pathway is no longer a viable solution. The legal process of attaching property is:

Lengthy, often taking months or years;

Expensive, with legal costs compounding the original debt;

And increasingly restricted by policy, with existing ministerial directives discouraging or prohibiting local authorities from attaching residential properties for debt recovery.

This leaves municipalities with a shrinking set of enforcement tools—and no effective replacement.

The result is a systemic contradiction: municipalities are expected to deliver services, maintain infrastructure, and meet bulk supply obligations, yet they are progressively stripped of the mechanisms required to ensure payment. In this environment, financial sustainability becomes unattainable.

The shift toward prepaid systems—while operationally efficient—further accelerates this problem. Prepaid electricity has already removed electricity debt from municipal books. As prepaid water is rolled out, water debt will follow the same trajectory. What remains is a revenue base heavily dependent on rates, taxes, and levies—precisely the categories for which enforcement is now weakest.

This is the core risk. Without effective enforcement mechanisms, municipalities will experience a rapid decline in cash flow, directly impacting their ability to maintain infrastructure, pay bulk suppliers, deliver consistent and reliable services, and sustain operational capacity.

The deterioration will not be gradual; it will be accelerated and compounding. Reduced revenue leads to reduced maintenance. Reduced maintenance leads to service failures. Service failures erode public trust, which in turn further weakens payment compliance. The cycle is self-reinforcing and difficult to reverse.

There is, however, an even deeper legal implication emerging from this ruling. By affirming that the Electricity Act and its associated regulatory framework prevail in cases of conflict or ambiguity, the judgment effectively subordinates the Local Authorities Act in practical application where service delivery intersects with sector-specific regulation. This introduces a precedent where municipal governing legislation—designed to empower local authorities to manage their affairs holistically—takes a back seat to sectoral laws.

The risk here is not merely legal hierarchy, but functional erosion. Local authorities derive their mandate, powers, and financial governance framework from the Local Authorities Act. If, in practice, that framework is overridden whenever it intersects with sector-specific regulation, municipalities may find themselves operating with diminished authority over their own revenue models and enforcement mechanisms.

This creates fragmentation not only in operations but in governance itself. None of this suggests that municipalities should operate outside the law or that consumer protections should be compromised. The ruling is legally sound within the framework of the Electricity Act.

However, regulation cannot exist in isolation from reality. What this case exposes is a fundamental misalignment between:

Sector-specific regulation (electricity);

Municipal operational models (integrated service delivery);

And national policy directives (restricting property attachment).

Each, in isolation, may be rational. Together, they create a system that is structurally unsustainable.

The Windhoek ruling should therefore not be seen as the conclusion of a legal dispute, but as a warning signal. If Namibia is moving toward a model where municipal services are treated as independent, enforceable units, then that transition must be deliberate and supported. It requires:

Legislative harmonisation between the Electricity Act and the Local Authorities Act;

The development of lawful, practical, and scalable debt recovery mechanisms;

Institutional reform to support service-level financial management;

And policy consistency across regulators and ministries.

Without such intervention, municipalities will be left in a position where revenue obligations and service delivery expectations remain, but enforcement capacity does not. That is not a sustainable equilibrium. And if left unaddressed, the long-term consequence will not be a legal victory for consumers—but a steady and unavoidable deterioration of municipal services for all.

Hans Hamukoto is an entrepreneur.