Namibia’s local authorities remain heavily dependent on property taxes for their survival, with government warning that the lack of diversified revenue streams is exposing councils to growing financial risks and constraining infrastructure development.
Deputy Minister of Urban and Rural Development Evelyn !Nawases-Taeyele told the National Assembly that property taxes continue to dominate municipal finances despite efforts to broaden revenue sources.
“Despite the increased diversification in municipal revenue, property tax remains the principal revenue source. Approximately 95% of all property taxes are levied in the form of a property value tax, also known as rates and taxes,” she said.
The revelation highlights the extent to which municipalities depend on a single revenue source at a time when many are grappling with rising infrastructure costs, urbanisation pressures and declining collection rates.
According to !Nawases-Taeyele, local authorities also derive income from land leases granted to major users such as power generation facilities and telecommunications operators, but these sources remain insufficient to significantly reduce dependence on rates and taxes.
Government is now encouraging councils to develop new income streams through public-private partnerships, commercial ventures and local economic development projects.
“The Ministry continues to advocate for local authorities to venture into joint ventures and the commercialisation of some services through Municipal Enterprise Development initiatives,” she said.
The push comes after government assessments conducted during the 2021/22 financial year and a follow-up review in 2023 found widespread weaknesses in municipal finances.
The reviews identified poor budgeting practices, low revenue collection rates, outdated tariffs, inadequate billing systems and poor record-keeping as major contributors to the financial challenges facing local authorities.
These shortcomings have affected councils’ ability to maintain and expand critical infrastructure, including water supply systems, sewer networks, electricity infrastructure and stormwater drainage facilities.
To improve revenue collection, government is also considering support for the rollout of prepaid water and electricity metering systems aimed at reducing debt owed by local authorities to utilities such as NamWater and NamPower.
The findings raise concerns about the long-term sustainability of municipal finances, with many councils remaining vulnerable to fluctuations in property-related income while facing increasing demands for service delivery and infrastructure investment.
