Walvis executive says Redforce is cheaper option

Amid residents’ concerns, executives at the municipality of Walvis Bay this week argued that Redforce Debt Management is cheaper and more efficient than enlisting lawyers to get the harbour town’s defaulting residents to cough up.

Redforce has collected N$85 million in eight months, they announced during a presentation to council.

Answering a flurry of councillors’ questions, the municipality’s finance general manager, Frans !Gonteb drew comparisons between using lawyers and Redforce, saying the latter does not charge fees for opening files, while lawyers would require N$950 for that.

He added that lawyers charge higher tracing fees and their collection commission is, on average, higher. While lawyers demand about N$435 for demand letters to debtors, Redforce does not require a cent for this service, !Gonteb told councillors.

The latter also does not charge for progress reports, while lawyers charge about N$400 for this.

Between August 2023, when Redforce came on board, to March this year, the company collected N$85 million – with N$13.5 million collected last month. In July 2023, the municipality was in a deficit of N$2.4 million in terms of daily cash flow. As this month, this position has improved to N$28 million, according to !Gonteb’s presentation. There is no suggestion that this amount is all due to Redforce’s collections.

Legal battle

In recent days, two petitions have been handed over to the municipality by angry residents demanding the removal of Redforce. Asked what the legal implications are for cancelling the contract with the debt collector, !Gonteb said: “It will end up in legal battle with costs [of about N$45 million]”.

The N$45 million is calculated as 12% interest of the N$378 million currently owed to the municipality by residents and businesses.

A breakdown of the municipality’s debtor dues showed that Kuisebmond residents collectively owe the municipality N$95 million, Narraville N$29 million and Meersig N$14 million, while residents of the luxury enclave Langstrand collectively owe N$7 million.

A municipal official who spoke to Namibian Sun on condition of anonymity said the positive bank balance the municipality has been able to achieve since the beginning of August 2023 was in part due to Redforce’s collections. Of the municipality’s 33 000 accounts, 8 000 have been handed to the debt collector.

Calls for calm

Reacting to a recent petition regarding Redforce’s presence in the harbour town, acting Walvis Bay CEO John Esterhuizen assured residents that all efforts were being made to address the discontent around the agency in a dignified manner.

“We want to assure you that your voice matters to us and that every point raised in the petition will be addressed. We always ensure that all our residents are treated with respect and dignity, and we take any allegations to the contrary very seriously.”

Five of the 10 municipal councillors – some whose accounts have been handed to Redforce for non-payment - voiced their dissatisfaction with the company's appointment. Councillors Ephraim Shozi, Albertina Nkoshi, Buddy Bramwell, Ryan Gordon and Paulus Kauhondwamwa attended a meeting called by the Walvis Bay residents.

Redforce CEO Julius Nyamazana declined to comment, saying his company’s contract with the municipality is a confidential one. “All I can say is that I am very happy with the work we have done for the client in a short span of time”.

- Additional reporting by Leandrea Mouers