Nyamazana: NaCC has vindicated RedForce’s integrity
RedForce CEO Julius Nyamazana says the Namibian Competition Commission’s (NaCC's) ruling that contracts awarded to the debt management company by local authorities were above board has reaffirmed its business principles and compliance with regulations.
Speaking to Namibian Sun yesterday, Nyamazana said the NaCC’s findings, along with previous court rulings in RedForce’s favour, validate the integrity of the company’s operations.
“We have always maintained that our operations are fully compliant, and our contracts with various local authorities are based on our proven expertise in debt management and recovery. Over the years, we have successfully recovered hundreds of millions for our clients,” he said.
“Unfortunately, success in this industry often attracts resistance from those who fail to meet their payment obligations. Nonetheless, we remain committed to delivering services in strict accordance with our contracts and in the best interests of our valued clients,” he added.
RedForce currently holds debt-collection contracts with Katima Mulilo, Grootfontein, Okahandja, Ondangwa, Windhoek, Henties Bay and Walvis Bay.
The NaCC concluded that RedForce’s contracts were beyond reproach, despite 139 similar firms being registered with the Business and Intellectual Property Authority (Bipa). After reviewing submissions, the commission determined that the awarding of debt collection tenders by local authorities was transparent and adhered to legal frameworks.
Citizen complaint investigated
In September 2023, the NaCC launched a screening exercise following a citizen’s social media complaint about RedForce’s dominance in municipal debt collection.
In a letter to Walvis Bay municipality CEO Victoria Kapenda, the NaCC's CEO and secretary to the commission, Vitalis Ndalikokule, explained that the enquiry sought to determine whether the concerns raised constituted anti-competitive practices under the Competition Act (Act 2 of 2003).
“The screening process included requests for information from various local authorities to gain a broader understanding of the market and the alleged conduct. Upon assessment, the commission concluded that the allegations did not constitute a violation of the Act and, therefore, did not warrant an investigation,” he said.
On 18 December 2024, the commission communicated its decision to the relevant parties, noting that although the matter did not raise any competition concerns, it would issue an advisory opinion on ways to improve market transparency and address residents’ concerns.
Ndalikokule acknowledged that while no competition law violations were identified, there remains a need to ensure that consumers are well-informed about their municipal bills.
“It was observed that most local authorities in Namibia have contracted the services of one debt collection agency – RedForce - out of 139 debt collection companies registered with Bipa. Concerns were raised that RedForce was receiving preferential treatment in the procurement process to the disadvantage of other debt management agencies,” he explained.
“There were also allegations that RedForce was overcharging residents in terms of debt collection fees. The commission engaged various local authorities to understand how they handle debt collection, whether internally or through external agencies, and to assess their procurement processes,” he added.
Favourable terms
Some local authorities indicated that they handle debt collection internally, while others outsource the service when their debt recovery departments are overburdened.
Ndalikokule confirmed that RedForce met all the requirements outlined in the tender invitations and that its financial proposal was deemed the most favourable. Regarding the alleged overcharging, the commission found that RedForce’s commission fee structure of 10 to 12% on the principal debt was within acceptable limits and did not constitute unfair pricing under competition law.
“RedForce conducts debt management services for gain and reward, while municipalities and town councils provide services to the public. The awarding of debt collection tenders to RedForce was carried out transparently and in accordance with procurement laws,” he said.
Impact on residents
Ndalikokule noted that the fee RedForce charges is directly passed on to debtors, increasing their outstanding balances. Additionally, RedForce applies a monthly compounding interest on overdue amounts, significantly raising the total repayment cost.
“In this context, the payment of the principal debt plus the 10 to 12% commission to RedForce is generally burdensome for debtors. However, this cannot be regarded as a direct price, as there is no service rendered to debtors for that amount,” he explained.
“The only charge imposed on debtors is the original principal debt owed to local authorities for services such as water supply and waste management. RedForce’s commission is not factored into the service charges levied by municipalities. As a result, the commission found no basis to classify these fees as overcharging under competition law,” he concluded.
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Speaking to Namibian Sun yesterday, Nyamazana said the NaCC’s findings, along with previous court rulings in RedForce’s favour, validate the integrity of the company’s operations.
“We have always maintained that our operations are fully compliant, and our contracts with various local authorities are based on our proven expertise in debt management and recovery. Over the years, we have successfully recovered hundreds of millions for our clients,” he said.
“Unfortunately, success in this industry often attracts resistance from those who fail to meet their payment obligations. Nonetheless, we remain committed to delivering services in strict accordance with our contracts and in the best interests of our valued clients,” he added.
RedForce currently holds debt-collection contracts with Katima Mulilo, Grootfontein, Okahandja, Ondangwa, Windhoek, Henties Bay and Walvis Bay.
The NaCC concluded that RedForce’s contracts were beyond reproach, despite 139 similar firms being registered with the Business and Intellectual Property Authority (Bipa). After reviewing submissions, the commission determined that the awarding of debt collection tenders by local authorities was transparent and adhered to legal frameworks.
Citizen complaint investigated
In September 2023, the NaCC launched a screening exercise following a citizen’s social media complaint about RedForce’s dominance in municipal debt collection.
In a letter to Walvis Bay municipality CEO Victoria Kapenda, the NaCC's CEO and secretary to the commission, Vitalis Ndalikokule, explained that the enquiry sought to determine whether the concerns raised constituted anti-competitive practices under the Competition Act (Act 2 of 2003).
“The screening process included requests for information from various local authorities to gain a broader understanding of the market and the alleged conduct. Upon assessment, the commission concluded that the allegations did not constitute a violation of the Act and, therefore, did not warrant an investigation,” he said.
On 18 December 2024, the commission communicated its decision to the relevant parties, noting that although the matter did not raise any competition concerns, it would issue an advisory opinion on ways to improve market transparency and address residents’ concerns.
Ndalikokule acknowledged that while no competition law violations were identified, there remains a need to ensure that consumers are well-informed about their municipal bills.
“It was observed that most local authorities in Namibia have contracted the services of one debt collection agency – RedForce - out of 139 debt collection companies registered with Bipa. Concerns were raised that RedForce was receiving preferential treatment in the procurement process to the disadvantage of other debt management agencies,” he explained.
“There were also allegations that RedForce was overcharging residents in terms of debt collection fees. The commission engaged various local authorities to understand how they handle debt collection, whether internally or through external agencies, and to assess their procurement processes,” he added.
Favourable terms
Some local authorities indicated that they handle debt collection internally, while others outsource the service when their debt recovery departments are overburdened.
Ndalikokule confirmed that RedForce met all the requirements outlined in the tender invitations and that its financial proposal was deemed the most favourable. Regarding the alleged overcharging, the commission found that RedForce’s commission fee structure of 10 to 12% on the principal debt was within acceptable limits and did not constitute unfair pricing under competition law.
“RedForce conducts debt management services for gain and reward, while municipalities and town councils provide services to the public. The awarding of debt collection tenders to RedForce was carried out transparently and in accordance with procurement laws,” he said.
Impact on residents
Ndalikokule noted that the fee RedForce charges is directly passed on to debtors, increasing their outstanding balances. Additionally, RedForce applies a monthly compounding interest on overdue amounts, significantly raising the total repayment cost.
“In this context, the payment of the principal debt plus the 10 to 12% commission to RedForce is generally burdensome for debtors. However, this cannot be regarded as a direct price, as there is no service rendered to debtors for that amount,” he explained.
“The only charge imposed on debtors is the original principal debt owed to local authorities for services such as water supply and waste management. RedForce’s commission is not factored into the service charges levied by municipalities. As a result, the commission found no basis to classify these fees as overcharging under competition law,” he concluded.
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