Windhoek will need to adopt stringent financial measures in the next financial year and all of us will need to demonstrate exemplary leadership and embrace innovation and creativity as we approach the next strategic period and beyond. – City’s Head of Management
[Today’s Exchange Rate: 1US$=N$14.24]
WINDHOEK, Namibia: The Municipal Council of Windhoek Chairperson of the Management Committee Councillor Fillemon Nangolo Hambuda has released the City’s 2021/2022 Annual Budget to be submitted to the Ministry of Urban and Rural Development for approval, in accordance with the statutory obligation.
A statement released to the media today has shown how the City’s total budget that amounts to N$4.9 billion will be used. It consists of the Operational Income and Expenditure Budget [OPEX], the Capital Budget Estimates [CAPEX] and the Revision of Additional Tariffs for 2021/2022.
“The budget was compiled according to the provisions of the Local Authorities Act (Act 23 of 1992) and Council Policies. Furthermore, the Strategic Plan set out the Council’s Vision, Mission, and Objectives, all of which informed operations. The 2021/2022, Budget is no different and considers the expectations and needs of the residents,” he said.
“The current Strategic Plan will come to an end in 2022 and the Municipal Council of Windhoek will start with the drafting of the new Strategic and Transformation Plan in 2021, which will speak to our understanding of our resident’s needs, especially the needs in the informal settlement, but at the same time, we will craft a plan to move the Municipal Council of Windhoek to financial sustainability.”
Councillor Hambuda revealed that to meet the total Budget, the Council needs N$4.9 Billion for the 2021/2022 Financial Year.
Of that amount, N$507 Million is for Capital Projects and N$4.4 Billion is for Operating Expenditure including maintenance of existing infrastructure.
The estimated revenue is N$4.6 Billion resulting in an operational result of N$213 Million surplus.
Included in revenue is land sales of N$300 Million and statutory funds of N$8 Million.
He emphasized that the operational expenditure budget does not include non-cash expenses of N$666 Million (including depreciation of N$564 Million).
The 2021/2022 operational budget figures are as follows:
| Operational expenditure | 4.39 Billion |
| Revenue | 4.60 Billion |
| Surplus | 213 Million |
He said that the surplus of N$213 Million is mainly due to anticipated land sales of N$300 Million and Statutory funds of N$8 Million.
However, non-cash expenses of depreciation and defined benefits of N$666 Million are not included in the budget. When these are included the result changes to a shortfall of N$453 Million.
“This means that Council is not generating enough revenue from tariffs to cover its operating and capital expenses,” he said.
The major breakdown of the operational expenditure is as follows:
Salary related (1,935 permanent employees) 35 %
| Repairs and maintenance | 5 % |
| Capital charges | 1% |
| General expenses | 58 % |
| Other | 1% |
The salary related expenses, he said, will be analysed in the coming year to ensure that our human resources capacity speaks to the resources required to execute the Strategy and Transformation Plan.
For the 2021/2022 financial year, the majority of tariffs have not been increased and the minimum increases are set out below.
Meanwhile, the electricity tariffs will be amended once the regulator, (Electricity Control Board-ECB) pronounces itself on the Operating and Reporting Manual to be submitted. For the budget, a 5% tariff increase for electricity was applied.
The water tariff adjustments are still under consideration and will be adjusted pending communication from NamWater.
Sewerage – No tariff increase is proposed.
Refuse Removals and Solid Waste Charges – a 5% tariff increase is proposed.
Property Rates – No tariff increase is proposed.
Bus Services – increases of 7% and 6% for smart card fares and cash fares, respectively were proposed.
“Over the past few years, the Capital Budget faced increasing demands for the provision and maintenance of basic services infrastructure, but without an increase in the available resources, he said.
“In fact, it has witnessed a diminishing revenue base thereby contributing to an imbalance between demand for better and improved services and limited resources. Coupled with this is the fact that for the past three financial years, only capital projects with secured funding were approved by the Minister.”
The Chairperson emphasised that the Council is committed to maintaining and upgrading existing infrastructure, to enhance the quality of life for all our people, by rendering effective and efficient municipal services. To fulfil this commitment, he said, the Council apportioned the scarce resources available as follows:
| Water and Roads Infrastructure | 46 | Million |
| Electricity Infrastructure | 174 | Million |
| Replacement of redundant vehicles | 23 | Million |
| Urban and Transport Planning | 15 | Million |
| Development and upgrading of markets and cemeteries 5 | Million | ||
| Law Enforcement to improve safety and security | 10 | Million | |
| Informal Settlement Upgrading | 104 | Million | |
| Housing Construction and Property Acquisition | 61 | Million | |
| Information Technology Infrastructure | 20 Million | ||
| Contingency CAPEX | 30 Million | ||
| Other Projects Upgrading | 18 Million | ||
| Total | 506,677,250.00 | ||
The capital budget is financed from three sources as follows:
Grant Funding from Central Government 148 Million
| Bank Funded | 155 Million |
| Revenue Funded | 204 Million |
| Total | 506,677,250.00 |
He also touched on land delivery, especially in the Informal Settlement, emphasizing that it remains a key priority and focus for Council.
In February 2021, Council approved the pre-allocation of land to households on the City of Windhoek’s waiting list and Informal Settlement upgrading areas. The target is to reach five thousand (5,000) pre-allocations in the informal settlements by February 2024. Also, included in the budget, is the construction of 100 affordable housing units in Goreangab Ext 4.
He said that a number of projects will also be undertaken to provide sanitation, servicing of residential streets and upgrade of mid-block sewers in the Informal Settlements.
“Municipal Council of Windhoek finds itself in a precarious position. The global Covid-19 pandemic presents a unique set of challenges combined with the prevailing issues around rapid urbanisation and the demands for basic services, land delivery, employment creation and economic development, the Chairperson said.
“Municipal Council of Windhoek will need to adopt stringent financial measures in the next financial year and all of us will need to demonstrate exemplary leadership and embrace innovation and creativity as we approach the next strategic period and beyond.”
He added that, “We are not in the best financial state at the moment but, I strongly believe that we are the only ones in the best position to change the current narrative and apply ourselves if we all pull together for the common good and well-being of our residents and sustainability of the organisation.”
