City budget under pressure

The municipality's reliance on tariffs to fund social services has made Windhoek one of the most expensive cities to live in.

10 September 2019 | Local News

The City of Windhoek has announced a 5% tariff increase on basic water supply, water consumption, household refuse removal, solid waste management and sewerage for the 2019/20 financial year.

The City said there were some water tariff adjustments that were wrongly gazetted. These have been corrected and affected customers will be credited.

Property tax has gone up by a whopping 15%. There is no tariff increase for electricity.

The increases will affect low-income Katutura residents by about 8%. For middle-income neighbourhoods such as Dorado Park it will mean an average increase of 10%, and 11% for high-income neighbourhoods.

These averages are calculated based on the total rates and taxes of sample households.

These may vary from one household to the next, depending on the property valuation. Water and electricity are subject to consumption tariffs.

Acting City CEO O'Brien Hekandjo said the ministry of urban and rural development had approved the adjusted tariffs.

Factors that are affecting the municipality's budget are the high unemployment rate in the city, high bulk costs charged by NamWater and NamPower, the increased pressure of urbanisation on the provision of basic services, a lack of funding assistance from the central government, and a reliance on land sales to fund operations.



Approved budget

The expected income for this financial year is N$4.7 billion; its expenses are anticipated to be N$4.5 billion. The surplus is only about N$130 million.

The social budget, which is included in the operational budget, accounts for the operations of the City Police (N$532.7 million), public transport (N$320.7 million), fire and other emergency services such as ambulance services (N$79.6 million), community services (N$13.7 million), and N$9 million for disaster management.

The social budget shows a deficit of N$494.6 million. The municipality carries the social budget, which is not funded by the central government. It generates about N$600 million from rates and taxes, which only goes towards the provision of services.

The City said only the central government can provide sustainable funding of the deficit. It said the reliance on tariffs to fund social services is unsustainable and makes the city one of the most expensive to live in.

One of the ways in which the municipality hopes to do to deal with the budget deficit is to maintain the salary budget below 34% or 35% of total spending.

It hopes to gradually increase repair and maintenance to 5% of its expenditure.

It intends to create a revolving fund from its land sales revenue, as well as fund its capital expenditure from a combination of debt and revolving funding.

It hopes for funding from the central government, as well as other donors, and loans to reduce its reliance on bulk suppliers, with, among other things, a 25-megawatt solar power plant.

It also intends to identify additional revenue such as the commercialisation of its fibre-optic network.

CATHERINE SASMAN

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