City’s debt metrics show improvement
The City of Windhoek has announced that its debt metrics have declined by N$244 million.
The result is contained in an unaudited council report highlighting the City’s activities.
“The improvement is mainly driven by a decrease in bad debts by N$244 million and an increase in service charges by N$300 million. There was a decrease in bad debts which emanated from improved collection,” the report states.
The City was also able to see an increase in revenue, emanating from tariff increases in property taxes and service charges.
“The increase in revenue was mainly due to tariff increases in property taxes and service charges ranging from 3.4% to 5%. The decrease in bad debts was due to improved collection as debtors balances stabilised around N$1.2 billion."
The City admitted that it was struggling to register its current ratio to above N$1 and said interventions were necessary to bring about this improvement.
“Despite registering an improved current ratio of N$0.60 from N$0.46 per every N$1.00, the liquidity ratio is still under pressure as current liabilities remain higher than current assets. Further interventions are still required to bring the ratio to N$1 and above,” the report stated.
Capital projects under consideration
“During the year under review, the council spent N$141 million on capital projects, with the electricity department as the biggest spender, accounting for 50%. N$66 million was financed through long-term loans from the Development Bank of Namibia and First National Bank amounting to N$60 million and N$6 million, respectively,” the City said.
“The rest were funded by internal revenue of N$54 million and government and related grants of N$21 million. The N$60 million was spent on a second bulk power supply point to be constructed by NamPower. This was followed by spending N$20 million on water reticulation and N$11 million on vehicle replacement. These projects are all aimed at improving service delivery,” it added.
The statement of financial position as of June 2023 indicated that the City's total liabilities stood at N$3 billion, made up of current liabilities set at N$1.8 billion, while its bank overdraft stood at N$113 million. Current long-term loans stood at N$726 million.
The result is contained in an unaudited council report highlighting the City’s activities.
“The improvement is mainly driven by a decrease in bad debts by N$244 million and an increase in service charges by N$300 million. There was a decrease in bad debts which emanated from improved collection,” the report states.
The City was also able to see an increase in revenue, emanating from tariff increases in property taxes and service charges.
“The increase in revenue was mainly due to tariff increases in property taxes and service charges ranging from 3.4% to 5%. The decrease in bad debts was due to improved collection as debtors balances stabilised around N$1.2 billion."
The City admitted that it was struggling to register its current ratio to above N$1 and said interventions were necessary to bring about this improvement.
“Despite registering an improved current ratio of N$0.60 from N$0.46 per every N$1.00, the liquidity ratio is still under pressure as current liabilities remain higher than current assets. Further interventions are still required to bring the ratio to N$1 and above,” the report stated.
Capital projects under consideration
“During the year under review, the council spent N$141 million on capital projects, with the electricity department as the biggest spender, accounting for 50%. N$66 million was financed through long-term loans from the Development Bank of Namibia and First National Bank amounting to N$60 million and N$6 million, respectively,” the City said.
“The rest were funded by internal revenue of N$54 million and government and related grants of N$21 million. The N$60 million was spent on a second bulk power supply point to be constructed by NamPower. This was followed by spending N$20 million on water reticulation and N$11 million on vehicle replacement. These projects are all aimed at improving service delivery,” it added.
The statement of financial position as of June 2023 indicated that the City's total liabilities stood at N$3 billion, made up of current liabilities set at N$1.8 billion, while its bank overdraft stood at N$113 million. Current long-term loans stood at N$726 million.
