The National Housing Enterprise (NHE) has reported a continued decline in profitability, with significant operating losses and liquidity challenges impacting its ability to meet short-term liabilities.
Deputy Minister of Finance and Public Enterprises Maureen Hinda-Mbuende revealed that despite efforts to improve, NHE’s operating losses reached N$38.2 million in 2023, following a deeper deficit of N$87.7 million in 2022.
Over the past five years, NHE’s gross profit fluctuated significantly, dropping from N$334.7 million in 2019 to N$92.9 million in 2022, before improving slightly to N$104.2 million in 2023.
However, the organisation has struggled with operating profit, recording negative figures since 2020.
“One of the key factors contributing to NHE’s financial challenges has been its high operating expenses, which peaked at N$182.2 million in 2022. The NHE’s operating expense ratio is alarmingly high compared to its gross profit, especially over the past three years. This has severely impacted the institution’s ability to generate profits and fulfil its housing mandate,” said Hinda-Mbuende.
She noted that the NHE has delivered 1,056 housing units over the past seven years, falling significantly short of its target of 5,000 units, further underlining the financial and operational inefficiencies.
Despite these challenges, the Deputy Minister praised the completion of NHE’s seven-year backlog of financial reports, noting its importance for transparency and accountability.
“Finalising seven years of backlogged reports is no small feat. It provides much-needed clarity to the NHE’s financial standing and sets the stage for more transparent operations moving forward,” Hinda-Mbuende said, emphasising the need for continued reforms.
Meanwhile, liquidity concerns remain a significant obstacle for NHE, with the institution facing difficulties in meeting its short-term liabilities over the past three years.
“NHE’s liquidity challenges are evident, particularly its inability to meet current liabilities over the last three years. This is a critical issue that must be addressed to ensure the institution’s financial sustainability,” said Hinda-Mbuende.
Despite this, the Deputy Minister reaffirmed the government’s commitment to supporting NHE through financial reforms and stronger governance structures, with a focus on improving housing delivery.
“The housing deficit in Namibia remains a pressing challenge, but with sound financial management and strategic planning, I am confident that the NHE can overcome these hurdles and meet its goals,” she said.
