Namwater could lose N$1b
…as ministries, municiapalities struggle to pay
By Maria Kandjungu
NAMWATER CEO Abraham Nehemia has little hope of recovering over N$1 billion owed to the state-owned water utility by various government ministries, agencies and other state institutions, dating back as far as 2017.
Namwater’s financial records show they are collectively owed over N$1,116 billion by 10 government entities, including town and village councils, the Namibia Wildlife Resorts (NWR), Roads Construction Company (RCC), Namport, the Namibia Airports Company (NAC), Roads Authority (RA), Nampower and Cenored.
Namwater’s annual financial statement for the 2018/19 financial year tabled in the National Assembly by Agriculture, Water and Land Reform Minister Calle Schlettwein this week shows that ministries owed over N$68 million, which almost doubled the previous year’s debt of N$39 million.
Topping the list of those owing Namwater are municipalities across the country, whose unpaid water bills amounted to over half a billion Namibia dollars, as according to the financial statement municipalities who owed Namwater about N$612 481 209 in 2018, owed over N$680 million by 31 March last year.
“I do not see all this money being recovered. I am just being realistic here, most of these debts are by those small municipalities and village councils who do not have any source of funds. You cannot ask them to pay money that they don’t have. People need water and we can’t just cut it off but they are unable to pay and that is our reality,” Nehemia said.
The records also show that unpaid water bills for town and village councils were fast increasing, as within a year their unpaid water bill increased by N$100 million, from about N$255 million in 2018 to over N$357 million in 2019.
Nehemia said the biggest mistake Namwater made was failing to manage the debts while they were still manageable by allowing them to accumulate over the years to where they are today.
“Bad debts this high are a pain in the neck, it makes your operations unstable and you don’t want such things. It has all accumulated to a point where there is really no way we are going to recover all of it. I don’t want to see them in the books anymore and I am going to work to ensure that they come to a manageable number.”
Nehemia noted that they have now developed and finalised a debt recovery strategy, which is waiting for approval from the board before implementation. He said the new strategy, among others, will look at installing prepaid water meters at government entities, writing off debt and providing incentives for financially troubled municipalities and councils that are also struggling with administrative and debt recovery issues.
“You are looking at issues of mismanagement at some of these town councils, and also poor [debt] collection strategies while some are not doing collections at all. The strategy will then look at engaging those entities to come with an agreement on an amount they can pay off for the other to be written off.
“We also want to help them put measures [in place] that will allow them to properly collect money from their residents and perhaps deploy some of our employees to work with them for even a year. Infrastructure management is also an issue we want to look at because most of these bills are from wasted water. The pipes are old, and they burst, and water is being wasted,” Nehemia said.
Despite the skyrocketing arrears, the state-owned enterprise still managed to make a profit of over N$29 million during the year under review. Nehemia noted that the profit was attributable to budgeting and target setting, but with less debt on its books Namwater’s earnings could improve.