City of Windhoek mayor, Sade Gawanas has acknowledged that City’s financial woes are being compounded by a huge salary bill and thus has highlighted that the City is looking at ways in which it can reduce it to acceptable parameters.
Gawanas also acknowledged that the salaries are above market salaries to some extent and that the situation in the City’s coffers has been worsened by the reality that City is owed at least N$1.2 billion, a figure that rose from the pre-Covid levels of about N$840 million.
“Our main challenge is our salary bill and council together with management is looking at ways within the permissible parameters to reduce or at least stabilize our salary bill whilst increasing our revenue. Though the salaries are above market in some aspect, the presented figures were still draft and yet to be verified as they are material different from other comparisons. Our debtors is our other main challenge and collecting for services has become a challenge given the amount of people in the City that are unemployed or is just not earning enough to pay for these services. The debt has significantly increased from before covid19 at N$840 million to N$1.2billion to date, which has adversely affected our cash flow,” Gawanas said last week.
Gawanas’ remarks were also earmarked at giving more clarity and context on the financial report that was released at a press conference on the 25th July 2022.
On the day, Independent Patriot for Change (IPC) councillor at the City of Windhoek, Jurgen Hecht said the City had suffered cumulative losses of N$2.8 billion between 2012 and 2022.
Hecht said last year the city obtained an overdraft; however, a loss of N$480 million was recorded.
This brought the loss to N$3.2 billion in a 10-year period.
Hecht further said as at 30 June 2020, the City’s current liabilities of N$2.3 billion exceed its current assets of N$1.64 billion by N$1.259 billion.
The councillor said the city’s employees earn between 30% and 40% above market-rate salaries.
“We have gained a lot of insight into the City’s financial affairs over the last year and a half. Yes, the financial position of the City requires intervention, but I can assure you that we are working on a financial recovery plan to try and bring us financial sustainability as per the new strategic plan. It is unfortunate that certain language was used in the press release on the 25th July 2022 have caused immense panic among our stakeholders, especially the residents and creditors but we will avail more detailed information and stats at a later stage to provide a full context and where the organization is heading so that you are well informed. One must understand that when you work with an organization this size and complexity it is not an easy task,” added Gawanas.
She went on to state that as the City has mentioned before, capital Cities are normally subsidized to ensure first class infrastructure and to reduce the cost of services to the residents.
“For example, in SA, central government is mostly taking care of the social agenda and major infrastructure of local authorities. We have further reviewed our performance the last five years and have looked at what has detracted us from implementing our strategy centre to our new strategy is financial sustainability hence why in the new financial year that has just started the first of July, this has become our first priority.
“Last month was extremely stressful with all articles in the media but I want to remind you that as we continue to strive towards development and creating a smart, sustainable and resilient City. I encourage each and every one of you to remain committed and consistent. Honesty and integrity will take us very far. We will rise above the challenges and negativity and become one of the greatest cities in Africa and beyond. We should remain focused and keep our eyes on the ball. Let us continue tackling the challenges by communicating effectively, and let us not allow too much political interference and let us substantiate the technocrats and their departments to improve and create conducive environments for our City to thrive,” explained Gawanas.