Katima CEO blasts Uutoni’s debt-collector stance
Negotiating with defaulters ‘fruitless’
Pulling no punches, Raphael Liswaniso says the minister is trying to score political points while local authorities are on their knees on his watch.
The CEO of the Katima Mulilo town council, Raphael Liswaniso, has described urban and rural development minister Erastus Uutoni’s call for local authorities to stop using debt-collector consultants as ‘irresponsible’.
For a minister who renders “very little support” to local authorities, Uutoni’s stance borders on electioneering, as it encourages residents to continue defaulting on their payment obligations, Liswaniso said.
The minister has done very little to address the plight of local authorities that are faced with skyrocketing debts, the CEO added.
He said irresponsible political statements by government leaders has led residents to think that municipal services are meant to be free, further fuelling non-payments.
Katima Mulilo has unleashed Redforce Debt Management on its defaulting residents, amid murmurs of discontent in some towns about the use of that company by local authorities. Redforce has defended its record and collection methods.
Ministry’s failure
Liswaniso said: “You know, we understand that there is a political dilemma and this is an election year. However, I believe and also understand that the minister - who is responsible for urban and rural development - is making statements that are very irresponsible, which can lead to the demise of local authorities”.
He juxtaposed the use of debt collectors by local authorities to how government created its revenue collector, the Namibia Revenue Agency (NamRA), to carry out a mandate that was entrusted to the finance ministry.
He went on to say that state-owned organisations such as Telecom Namibia also make use of debt collectors because of their circumstances, yet the ministry wants local authorities - who are poorly subsidised by the state - not to do the same.
“The central government has a ministry of finance that was tasked to collect revenue for government. However, due to the failure of the ministry to collect this revenue, they brought in NamRA, a third party collecting on behalf of government.”
“The government subsidises local authorities with insignificant amounts of money. For example, over a budget of N$100 million, you are giving a local authority N$1.5 million as a subsidy to provide services.
Liswaniso said instead of speaking about the use of debt-collection agencies, the minister should instead ask the following questions: How much is land servicing for local authorities? How costly is land?
“The price of land is raised by the fact that local authorities do not have money to service land,” he said.
“Government is not providing these monies to local authorities to service land. It's required for a local authority from its revenue to service this land. From its revenue, local authorities need to recover the cost.”
While local authorities need to recover these costs, residents are not paying their dues, he added.
‘NamRA doesn’t negotiate’
Uutoni has on several occasions said local authorities should avoid contracting debt collectors, adding that they should instead enter into agreements with defaulting clients.
However, Liswaniso has questioned what would happen if clients don’t honour these agreements, yet local authorities are told not to disconnect services.
“The minister is proposing the negotiation of accounts. NamRA does not negotiate. Our mandate is to provide services. If we don't collect or we go on negotiating and we don't find people coming to the negotiating table, what do we do? Those are the questions that the minister needs to address,” the CEO said.
“The minister talks often about poor service from local authorities. The non-collection of revenue does not only leave the local authority without revenue, but it plunges the local authority into debt. Our infrastructures are outdated, you can't replace those infrastructures with the money that you are getting [through internal collections].”
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For a minister who renders “very little support” to local authorities, Uutoni’s stance borders on electioneering, as it encourages residents to continue defaulting on their payment obligations, Liswaniso said.
The minister has done very little to address the plight of local authorities that are faced with skyrocketing debts, the CEO added.
He said irresponsible political statements by government leaders has led residents to think that municipal services are meant to be free, further fuelling non-payments.
Katima Mulilo has unleashed Redforce Debt Management on its defaulting residents, amid murmurs of discontent in some towns about the use of that company by local authorities. Redforce has defended its record and collection methods.
Ministry’s failure
Liswaniso said: “You know, we understand that there is a political dilemma and this is an election year. However, I believe and also understand that the minister - who is responsible for urban and rural development - is making statements that are very irresponsible, which can lead to the demise of local authorities”.
He juxtaposed the use of debt collectors by local authorities to how government created its revenue collector, the Namibia Revenue Agency (NamRA), to carry out a mandate that was entrusted to the finance ministry.
He went on to say that state-owned organisations such as Telecom Namibia also make use of debt collectors because of their circumstances, yet the ministry wants local authorities - who are poorly subsidised by the state - not to do the same.
“The central government has a ministry of finance that was tasked to collect revenue for government. However, due to the failure of the ministry to collect this revenue, they brought in NamRA, a third party collecting on behalf of government.”
“The government subsidises local authorities with insignificant amounts of money. For example, over a budget of N$100 million, you are giving a local authority N$1.5 million as a subsidy to provide services.
Liswaniso said instead of speaking about the use of debt-collection agencies, the minister should instead ask the following questions: How much is land servicing for local authorities? How costly is land?
“The price of land is raised by the fact that local authorities do not have money to service land,” he said.
“Government is not providing these monies to local authorities to service land. It's required for a local authority from its revenue to service this land. From its revenue, local authorities need to recover the cost.”
While local authorities need to recover these costs, residents are not paying their dues, he added.
‘NamRA doesn’t negotiate’
Uutoni has on several occasions said local authorities should avoid contracting debt collectors, adding that they should instead enter into agreements with defaulting clients.
However, Liswaniso has questioned what would happen if clients don’t honour these agreements, yet local authorities are told not to disconnect services.
“The minister is proposing the negotiation of accounts. NamRA does not negotiate. Our mandate is to provide services. If we don't collect or we go on negotiating and we don't find people coming to the negotiating table, what do we do? Those are the questions that the minister needs to address,” the CEO said.
“The minister talks often about poor service from local authorities. The non-collection of revenue does not only leave the local authority without revenue, but it plunges the local authority into debt. Our infrastructures are outdated, you can't replace those infrastructures with the money that you are getting [through internal collections].”
[email protected]
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