Eenhana: Whither Trust Fund for Regional Development and Equity Provisions

By Confidence Musariri
July 2013
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The report of the Auditor-General for the Eenhana Town Council for the financial year ended 30 June 2012 mentions a huge operation loss incurred.

 

The Town Council received a qualified audit opinion on its financial statements.

 

The accumulated surplus for the year under review decreased from N$ 6.4 million in the previous year to N$ 1.3 million. The operating loss amounted to N$ 4.7 million and negative adjustments to more than N$ 300 000.

 

The Special Fund accounts are no longer fully cash backed as there appears to be a lack of cash and investments to the amount of N$ 3.5 million.

 

This means that the Fund accounts cannot be fully utilised for the purpose for which they have been created.

 

However, on the positive, the current assets exceed the current liabilities with N$ 7 million which would mean that the financial position of the town council is fairly in order.

 

Capital expenditure for the year amounted to more than N$ 6.5 million, mostly for town planning and development, which is good and may lead to increased income at a later stage.

 

 With 91% of local authorities in Namibia receiving qualified audits, Eenhana has more positives than negatives in the Auditor General’s report.

 

Chief Executive Officer of the Eenhana Town Council (ETC), Walde Ndevashiya says the absence of a committed subsidy from central government affects the budgeting of local authorities.

 

 

“A town like ours needs to invest in infrastructure and service the land but the revenue base is low.  If the Trust Fund for Regional Development and Equity Provisions served its purpose, we wouldn’t be sitting with challenges of funds. Decentralisation does not make sense when people come to the regions and towns like Eenhana to find no infrastructure for them to start with. To date Eenhana has never felt the effects of the Trust Fund. It is nonexistent. I can safely speak on behalf of other local authorities when I say the Fund does not benefit local authorities,” says Ndevashiya.

 

The Trust Fund for Regional Development and Equity Provisions was established in terms of Section 2 of the Trust Fund for Regional Development and Equity Provisions Act, 2000 (Act 22 of 2000).

 

The Trust Fund’s main objectives are to financially assist with:

i) The development of regions and local authorities; and

ii) The implementation, through the active participation of the local people and in accordance with the Decentralisation Enabling Act, 2000, of the decentralisation programmes at regional and local authority levels in Namibia.

 

It should also provide, either at its own initiative or when so requested by a regional council or a local authority council, funding for:

i) Technical assistance, guidance and training in the identification, planning, preparation, appraisal, monitoring, evaluation, financing, implementation or management of development projects; and

ii) The formulation of specific projects, needs or proposals in regions or local authorities.

 

The Trust Fund should also conduct negotiations in respect of and to control business ventures on behalf of Regional Councils and Local Authorities.

 

The Board of the Fund consists of ten members, all appointed by the Ministry of Regional and Local Government, Housing and Rural Development (MRLGHRD). The Ministry also funds the Trust Fund.

 

At year end, the undistributed portion of the funds received, forms part of the net surplus of the Trust Fund.

 

These should be shown as a net liability or transferred to a specific reserve created for such purposes, according to the Auditor General.

 

 

Adds Ndevashiya, “Government gave us Tipeeg for development which is short term. From the onset I questioned Tipeeg especially if the Trust Fund which is supposed to be a long term initiative was ‘dead’. The development of local authorities is the benchmark of national development. Let’s restructure the Trust Fund if local authorities are to make it.

 

In his qualified opinion on the Trust Fund last year, the Auditor General Junius Kandjeke noted that there were only two meetings held during the year audited.

 

As per the Trust Fund for Regional Development and Equity Provisions Act, 2000 Section 8(1), “The Board shall not, without the written consent of the Minister, hold less than four meetings during any year”. Thus not all meetings as prescribe by the Act were held during the year under review, stifling development.

 

Said Kandjeke, “The Board did not fulfil all their statutory duties as per paragraph 6, subsection (e) to (h) of the Trust Fund for Regional Development and Equity Provisions Act, 2000 (Act 22 of 2000),” adding that one of the two meetings they had according to the minutes presented was “for the preparation of the annual financial statements.” 

 

The Fund has failed its mandate to determine the allocation of funds from the Trust Fund to the Housing Revolving Fund established by regional councils and local authority councils in terms of section 8 of the National Housing Development Act, 2000.

 

Eenhana has managed to weather this negligence by establishing a vibrant Build-Together Program which has provided accommodation to hundreds of its residents and has become exemplary for money local authorities. The waiting list remains high for residents needing houses, but so is the list of those served by the initiative. Recently, 55 residents were allocated new plots under the scheme.

 

Eenhana, with town and town-lands measuring 5205, 8223 hectares was proclaimed as a town on the 15th April 1999. Apart from the two schools, mission hospital, Tribal Authority office and the colonial South African army base, no other infrastructures were visible in Eenhana prior to independence.

 

Continues Ndevashiya, “We need to have a predictable funding for local authorities. Eenhana Town Council has a Strategic Plan (2008-2014). This plan should be in line with NDP4, Vision 2030 and the ruling Swapo Party Manifesto. However, if as CEO I do not know what I will be getting from the Medium-Term Expenditure Framework (MTEF), then my Strategic Plan is a wish list. Local authorities must be aware of how much they will get for the next three years of the national budget. Government ministries know, so do parastatals, why not us when we are the ones on the ground spearheading national development? As Eenhana town council we have learnt to develop a lot of suburbs through Public-Private-Partnerships (PPP), not government. The council allocates land and gives to developers (PPPs) to work it. We are trying to be proactive. Government should be funding local authorities to service the land and other major initiatives through the Trust Fund. Over the years we have learnt not to wait on Government funding because it never comes. It took us five years to wait for the funding of an ‘Open Market’. Government did not find it a priority. We had to put on hold some of the projects we wanted to do and completed the first phase of the ‘Open Market,’ at the cost of N$10million. We are still to get to the second phase and our sister town in Belgium has agreed to fund the second phase. We could not wait for Government.”

 

Although the town was proclaimed in 1999, it was only granted autonomy in 2002 and could now make its own decisions on development through capital projects.

 

The beauty of Eenhana is the fact that it is located in a preserved forest with natural vegetation that is still intact. One can barely notice that there close to 24 000 people in this town because of the vegetation. Schools around the town have Environmental Clubs, as part of the town’s Urban Environmental Sustainable Policy. The council demands that certain natural trees are not cut, no-matter what cost.

 

Below is the full extract of the interview with Walde Ndevashiya.

 

PF: Besides funding and unserviced land, what remains the challenge?

 

WN:  The challenge is creating an understanding of marketing the town. People ask ‘where is Eenhana?’ They want to know where the facilities are, even to lure banks here is a challenge. Yet Eenhana is the administrative capital of the Ohangwena region. Servicing of land is the most expensive venture for any local authority, even metropolitans like Windhoek. There is a massive influx of people to town but there is no serviced land for them to stay. That is where I question central government for funding projects for a ministry and even regional authority, but telling town councils to find their own money. We are the grassroots of development; those towns that cannot get extra funding are ghost towns right now because they are waiting for government.

 

PF: Of course land is a hassle?

 

WN: Indeed, land delivery starts from planning, surveying, designing and servicing.  We have too much land, but very little un-serviced land. Local authorities are often blamed for being slow in land delivery. However it’s not always in our hands. For example, the proclamation of new townships is done by a board in Windhoek. It takes two to three years to get the proclamation from Windhoek. NAMPAB is the statutory consisting of permanent secretaries from stakeholder ministries and tasked to do this, but it has a lot of bureaucracy. The fact that us who are on the ground are applying for a township proclamation means that we know the needs of our people. At times, NAMPAB fails to approve the proclamation because there is no quorum. To make matters worse, this body only meets twice a year, yet we need to proclaim land and move on.

 

PF: How would you rate your service delivery and revenue collection?

 

WN: We have a good rate of payment. The residents are supportive as compared to other towns. I have never sat in a meeting to debate about lack of money for salaries, let alone Namwater and Nored payments. We have a project on our Strategic Plan to engage the community in our turnaround strategy. Councillors conduct periodic meetings in wards and different suburbs to hear the needs and complaints of the residents.  Even the NCCI branch is vibrant and all this enables us to act and give the residents what they want.

 

PF: How do you intend to lure investors knowing the challenges that are there?

 

WN: Since 2008 the Eenhana Expo has grown tremendously. It is now second to Ongwediva in the north and perhaps the third largest in the country. That tells you the level of interest. We initially had 25 tables for the gala dinner and in the end we sold out 40 tables from corporate Namibia. We have a lot of international exhibitors coming this time, Botswana, China, South Africa and Zimbabwean business people are all exhibiting here now. Every year we have something new.  It’s a new feeling. By not coming to Eenhana, you don’t know what you are missing. We are growing fast in terms of development. The buying power is strong. Eenhana is now the preferred town for residential purposes. Where people operating businesses in Oshikango would drive to Ondangwa and Oshakati for accommodation, they now prefer settling in Eenhana. We have a lot to offer.  Of course the President (Dr. Hifikepunye Pohamba) is from this area, but we don’t want to sell the town because the President of the country is from here.  We want people to come here because we are responsible and the opportunities and the services we offer, besides our strategic location.  Come to Eenhana and grow your business with the town. We now have big super markets coming here, since Shoprite and Woermann brock landed recently, everyone else is on the way. Do not be left out. PF