EDITORIAL
Namibia’s industrialisation agenda is facing a silent, creeping bottleneck. This is not from a lack of political will or investment potential, but from a severe liquidity trap engineered by local government failures.
At the heart of it is the mounting crisis of municipal default, where local authorities and select state-owned entities have accumulated a colossal N$912 million in total debt owed to the national power utility, NamPower.
Of this near-billion-dollar backlog, towns and village councils in explicit breach of existing repayment arrangements account for N$557 million. This structural failure to service debt is more than just bad bookkeeping – it directly threatens the country’s national macroeconomic stability.
The operational consequences for NamPower are severe. Starved of critical capital, the national utility faces massive obstacles in upgrading local generation infrastructure.
When municipalities withhold hundreds of millions, they actively deplete the finances required to fund domestic power plants.
Consequently, Namibia remains heavily shackled to expensive electricity imports from regional neighbours, a vulnerability that the Ministry of Mines and Energy has repeatedly warned is completely unsustainable.
Capital that should be reinvested into expanding domestic capacity is instead diverted to settle import bills or absorb credit losses.
This cash-flow shortfall directly undermines Namibia’s transition to green energy. While renewable sources like solar and wind are expanding, their intermittent nature requires a highly stable, robust baseload capacity to ensure grid security.
Upgrading this baseload requires substantial capital investments in biomass, hydro, and battery storage systems.
Without the N$912 million trapped in municipal ledgers, NamPower cannot build the backup infrastructure needed to support large-scale renewable projects. We are effectively stalling our own green transition because local administrators treat utility bills as optional suggestions.
The broader casualty of this fiscal irresponsibility is national industrialisation. Modern manufacturing, agro-processing, and mining operations cannot function on volatile, imported, or rationed electricity.
Investors look for competitive power tariffs and absolute security of supply before building factories. If NamPower cannot expand capacity, the industrial sector will stall, job creation will flatline, and Vision 2030 will remain out of reach.
Poor domestic power generation directly curtails the production capacity required to transform Namibia from a raw material exporter into an industrial powerhouse.
This crisis highlights a profound flaw in how local governments view their corporate relationships. Municipalities must stop treating NamPower as an extension of a charitable state department and start treating it as a vital commercial business partner.
For years, council chambers have produced nothing but excuses ranging from historical structural imbalances to revenue collection gaps.
Yet, as NamPower Managing Director Kahenge Haulofu recently pointed out, these very same towns are actively selling electricity to local consumers and collecting the cash, but deliberately choosing to spend it elsewhere rather than paying their bulk supplier.
This practice is financially reckless and breaches the basic tenets of contract law.
Equally troubling is the blatant double standard in enforcement.
There is a glaring contradiction in how debt is managed across different levels of Namibian society.
When ordinary, working-class citizens default on a minor electricity or water bill, municipal debt collectors act swiftly, disconnecting services, deploying private debt collectors, and leaving households in the dark. Yet, when the local authorities themselves default on hundreds of millions of dollars, they expect and frequently demand to be treated with kid gloves.
They seek political interventions, debt write-offs, and infinite extensions, completely insulated from the harsh realities faced by the public.
This culture of public sector entitlement must end. Local authorities cannot operate under the assumption that they are exempt from financial accountability while their own residents are subjected to strict credit controls.
The Electricity Control Board (ECB) and central government must enforce strict financial discipline.
Electricity revenues collected by municipalities must be strictly ring-fenced to ensure bulk suppliers are paid first. If local administrators cannot manage these basics, their distribution licences should be handed over to Regional Electricity Distributors (REDs) or managed directly via prepaid bulk systems. Namibia’s industrial future is far too important to be compromised by municipal mismanagement.
Write to us on :editor@namibiabsunessreview.com
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