Africa-Press – Namibia. DESPITE the chief executive officers (CEOs) of local authorities receiving an announcement of impending budget cuts in December, the minister of urban and rural development, Erastus Uutoni, yesterday said it is not final.
Some local authorities say the announced budget cuts would not impact their development and operational activities, and others believe it could be disastrous.
On 24 December 2021, the ministry’s executive director, Daniel Nghidinua, sent a letter to the chief regional officers and CEOs of local authorities, announcing that the Ministy of Urban and Rural Development’s budget ceiling for the 2022/23 financial year has been cut due to the Covid-19 pandemic.
Nghidinua said the cut would apply to both regional councils and local authorities, and no new projects would be considered. “Please note the ministry was advised by the National Planning Commission (NPC) that priority should be given to ongoing projects with active activities, of which the tender was awarded and signed, as well as projects with contractual obligations,” he said.
Nghidinua said a new budget ceiling would be announced in due course. Katima Mulilo Town Council (KMTC) CEO Raphael Liswaniso says his town will survive the central government’s financial backing.
“We understand how the central government is struggling to make ends meet, and KMTC will not remain a crybaby. As an entity, the town council has put in place its own financial and economic survival strategies, which I am certain will see us through this economic downturn.”
Liswaniso says the government owes the town council over N$14 million for services rendered as a result of the Covid-19 pandemic. The rendered services have led to the skyrocketing of the town council’s NamWater bill from N$11 million to N$28 million for the 2020/21 financial year.
“The only thing we need from the central government is to reimburse even 50% of the over N$14 million in Covid-19 services, since this was the deal in KMTC opening free services and losing massive income,” Liswaniso says.
The town council has managed to reduce its NamWater bill without the backing of the central government by N$10 million, he says. Swakopmund CEO Alfeus Benjamin says the decision will not impact their activities significantly, as their projects are either funded through joint-venture initiatives, or are self-funded by the council.
“Swakopmund Municipality was allocated N$2 million, which we added to the servicing of DRC extension 31. With that we will deliver 150 erven for the low-cost housing sector. The project commenced in November 2021, and we hope to complete it by March 2022. The rest of the funding is provided by the council,” says Benjamin.
Otjiwarongo CEO Moses Matyayi says they are awaiting a full explanation on how the budget cut would impact specific local authorities. “We already have ongoing projects with active activities for the allocated funds for this financial year (2021/2022), hence we trust that the ministry and the NPC will not deviate from their statement of what will be prioritised,” he says.
The municipality of Otjiwarongo was allocated developmental capital of N$8 million for the construction of services during the 2021/22 financial year. Matyayi says about N$2 million was spent on town planning services rendered to the council for the establishment of 21 extensions.
“The remainder has been split between the land surveying of 16 of these extensions and the upgrading of the town’s sewage outlet pipe that has since become leaner for our expanding population. All these projects are active, and we believe this will not hamper our progress,” he says.
Nghidinua in the letter said local authority projects can continue, as not all depend on treasury allocations. “Not all projects are funded by the treasury, some are funded by the local authorities’ budgets,” he said.
‘RESIDENTS WILL SUFFER MOST’ Former National Council member Nico Kaiyamo says residents will suffer most, as infrastructure such as housing, roads, and sewage would be impacted. He says only the bigger municipalities with financial muscle can confidently say they will survive without government funding.
“Many municipalities were already on their knees before this announcement. The decision by the ministry would impact badly on mismanaged municipalities. It’s very sad that the ministry is only waking up now. They have been approving and turning a blind eye to mismanagement in most local authorities,” Kaiyamo says.
Retired local authority official Gert Kruger says municipalities which claim they can get by without the government, will not survive for long in an economy that has been disrupted by the Covid-19 pandemic.
“In the long run, it becomes a sustainability issue. What the government forgot is that not all local authorities collect their income on a monthly basis, and this goes back to Covid-19, which has an impact on the economy. Many local authorities have been struggling to collect money from water bills,” he said.
He warns that local authorities and their employees would have to brace themselves in the long run, as these cuts would surely impact service delivery.
CEOs from smaller municipalities such as Okahandja and Mariental believe the announced budget cut spells trouble. “The directive is clear. Okahandja is not exempted. We are in the same boat. Trouble . . . “ Okahandja CEO Alphons Tjitombo said.
Mariental CEO Paul Nghiwilepo says they are yet to assess the extent of the impact of the budget cuts. ‘NOT FINAL’ Meanwhile, Uutoni yesterday said the announcement is not final.
“The 2022/2023 national budget is yet to be finalised for us to have a 100% clear picture, but I cannot rule out budget cuts,” he said.
During the 2021/22 financial year, the ministry allocated N$510 million for the habitat and housing programme, aimed at ensuring the availability of basic municipal infrastructure, services, as well as the provision of housing.
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