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Home Business & Economy

Electricity, salaries dominate Windhoek’s N$5bn budget 

by editor
November 7, 2023
in Business & Economy, Finance
4
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The City of Windhoek’s budget for the fiscal year 2023/2024 is dominated by electricity and salaries, claiming a significant share of the N$5 billion allocated.

Salaries alone account for N$1.539 billion, constituting 32% of the total budget, while NamPower electricity costs amount to N$1.809 billion, representing 37% of the allocated funds.

This comes as the Ministry of Urban and Rural Development recommended a 40% allocation for salaries, but the City of Windhoek has capped it at 35% to maintain financial sustainability.

City Mayor Joseph Uapingene said the budget is strategically designed to focus on efficient service delivery, emphasising infrastructure maintenance and expansion in crucial areas like water and electricity. 

Uapingene further highlighted Windhoek’s commitment to meeting land delivery and council housing objectives while addressing operational and capital expenses.

“On the operational front, a capital expenditure budget of N$513 million was proposed, with N$507 million approved. Approximately N$460 million is allocated to infrastructure and housing projects. The City has been vigilant in controlling tariff increases, keeping them in line with the previous year, despite the challenges posed by high inflation,” he said.

In addition to salaries, Uapingene said the budget is influenced by NamPower costs, which have increased by 9.8%, and a corresponding 9% rise in resident fees.

While the City has absorbed some of these increases, he noted that they continue to pose a substantial burden on municipal finances.

The City’s Strategic Executive of Finance and Customer Care Jennifer Comalie said the City’s debt book stands at N$1.2 billion as of 31 October 2023, with N$963 million in arrears.

“Efforts are underway to identify and rectify long-outstanding debts that are assessed as not collectable. This includes addressing debts such as free water debt, which amounted to N$60 million on 30 June 2022, and N$105 million on 30 June 2023,” she noted.

She said inflation has affected the disposable income of the City’s residents, adding to the challenges faced by Windhoek.

The City contends with high unemployment, the ongoing effects of the COVID-19 pandemic, a rapidly growing population, and the expansion of informal settlements due to urbanisation trends.

“These factors place immense pressure on the City’s already strained resources and infrastructure,” she noted.

The Municipality’s expenditure is at N$4.8 billion, leaving a surplus target of N$165 million.

“Achieving this surplus remains a delicate balancing act for the City council due to the burden of social services and decentralised operations,” she said.

Furthermore, Windhoek has initiated revenue enhancement projects, such as addressing valuation backlogs and property audits. 

Comalie said these efforts have resulted in an annual revenue increase of around N$20 million. 

“The City’s recently unveiled five-year strategic plan prioritises housing, land services, electricity, and renewable energy projects. Notable among these initiatives is the development of a 25-megawatt solar plant, which is currently in the planning stages. The Municipality aims to further expand its capacity in renewable energy,” she said. 

Meanwhile, the City is working towards transitioning to a fully prepaid business model, particularly for electricity services. 

“This shift not only improves the City’s financial management, but also empowers residents to have greater control over their budgets,” she said.

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