STAFF WRITER
The N$100 electricity note will no longer stretch as far.
From next month, households across Namibia will receive fewer electricity units for the same amount of money after the Electricity Control Board (ECB) approved a 3.7% electricity tariff increase.
The increase comes at a time when many Namibians are already struggling to keep up with rising living costs, with households facing higher bills for basic services, transport and food.
Last week, the City of Windhoek also announced increases to municipal tariffs effective 1 July 2026.
The increases, averaging 4%, affect essential services including water, rates and taxes, sewerage, waste management, refuse removal and the fire brigade levy.
For many households, these combined increases could put further pressure on already stretched incomes.
Economist Abraham Eita said small percentage increases can have a major impact on low-income households.
“A 4% tariff increase may look small on paper, but for a low-income household it can mean choosing between settling a municipal bill, buying enough food or paying for transport to work. In economics, percentages can sometimes hide pain,” Eita said.
He said the bigger concern is not only how much prices rise, but whether incomes are increasing at the same pace.
“The real question is not only how much prices rise, but whether people’s incomes can keep up,” he said.
The latest 2023 Population and Housing Census Labour Force Report shows the scale of the challenge facing workers.
The report found that 34.1% of Namibia’s workforce earns less than N$2 000 per month, while only 3% of employed Namibians earn more than N$40 000 monthly.
Namibia’s labour market remains under pressure, with a population of more than three million people but only about 867 247 people classified as part of the labour force.
The unemployment rate stands at 36.9%, while employment-to-population ratios remain low, with men at 33.4% and women at 25.2%.
Eita said this means many households depend on one income earner, while others survive through informal work, remittances or temporary opportunities.
“People need transport to look for work, electricity to study or run a small business, water for basic dignity and survival, and food to remain productive,” he said.
POWER COSTS RISE
The ECB approved the electricity increase after reviewing NamPower’s application for the 2026/27 financial year.
NamPower had initially applied for an 8.4% bulk tariff increase, but the regulator reduced the adjustment after considering affordability concerns.
ECB chief executive officer Robert Kahimise on Monday said the decision was aimed at balancing the sustainability of the electricity sector with the financial pressures facing consumers.
“Having carefully considered the evidence before it and being mindful of the affordability pressures facing electricity consumers, the ECB Board resolved to approve a moderated bulk tariff increase of 4.8%, significantly below the 8.4% sought by NamPower,” Kahimise said.
The increase was later reduced to 3.7% after the government provided a N$90 million relief package.
The package includes N$50 million from the Long Run Marginal Cost Fund and N$40 million from the National Energy Fund.
The average bulk tariff will rise from N$2.06 per kilowatt-hour (kWh) to N$2.14 per kWh from 1 August 2026.
Had NamPower’s original application been approved, the tariff would have increased to N$2.23 per kWh.
WHO FEELS THE BIGGEST IMPACT?
Residents in Erongo will feel the biggest impact, with a N$100 electricity purchase buying only 31.11 units.
Windhoek residents will receive 37.60 units, while Northern Regional Electricity Distributor (Nored) customers will receive 36.35 units.
The Central North Regional Electricity Distributor (Cenored) customers will receive 35.52 units, while Keetmanshoop residents will receive 33.89 units.
THE HOUSEHOLD SQUEEZE
Eita warned that rising costs are affecting households’ ability to participate fully in the economy.
He said families are increasingly spending most of their income on survival, leaving little room for savings, education, investment or supporting small businesses.
Businesses are also affected because consumers have less disposable income.
“When households spend more on basic needs, businesses lose customers because people have less money to spend,” Eita said.
He said the combined impact of rising electricity prices, municipal bills, food costs and transport expenses could deepen inequality.
In Windhoek, where many workers rely on public transport, the pressure is particularly severe.
A worker earning the minimum wage of about N$4 000 per month can quickly see income consumed by daily expenses.
Transport costs alone can take around N$700 per month, while daily living expenses in the city can range between N$200 and N$450, depending on household size and circumstances.
Even at N$200 per day, monthly basic expenses can reach about N$6 000, before including rent, school costs, healthcare and family support.
Balancing affordability and sustainability
Eita said the answer is not to stop municipalities or utilities from maintaining infrastructure.
Public services need funding, and inflation risks must be managed.
However, he said tariff decisions must always consider whether households can afford them.
“When interest rates, municipal bills, food prices and transport costs rise together, the combined effect becomes too heavy for ordinary residents,” he said.
He called for stronger support for low-income households, improved public transport planning, job creation and ensuring that tariff increases result in visible improvements in service delivery.
The City of Windhoek, he said, should clearly communicate how additional revenue will improve water supply, waste management, sanitation and emergency services.
“People are more likely to accept higher charges when they can see better value,” he said.
Namibia’s capital remains the centre of economic opportunity, but Eita warned it should not become a city where survival becomes unaffordable for workers and job seekers.
“The cost-of-living squeeze is not just a household problem; it is a development issue,” he said.
“A healthy economy is not measured only by trade statistics and gross domestic product figures. It is measured by whether ordinary people can afford to live with dignity.”
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