Sankwasa boots RedForce as debt row hits N$1,9 billion at local authorities

Minister of urban and rural development James Sankwasa has directed all municipalities and town councils not to renew their contracts with RedForce Debt Management.

He cites economic and political problems caused by the company’s operations.

In a directive issued on 4 August, Sankwasa further instructs local authorities which have not yet entered into agreements with RedForce to refrain from doing so.

Several state-owned enterprises and local authorities have contracted RedForce to collect outstanding debt of more than N$2 billion.

Sankwasa appears to accept that the company’s strict enforcement of the rules has become a “political problem”.

“RedForce has caused many economic and political challenges and problems for citizens and residents in all such local authorities that use the services of this company,” Sankwasa says in the letter addressed to all mayors and chief executives of local authorities.

‘AGGRESSIVE TACTICS’

The directive comes amid growing public outrage over RedForce’s alleged aggressive debt recovery tactics, which some community leaders have labelled as exploitative.

At several towns, residents have accused the company of disconnecting water and electricity without proper notice and imposing excessive penalties.

Sankwasa says the use of the debt collector’s services had a “very negative effect” on citizens and must be stopped.

“This ministerial directive should be adhered to without fail,” he says.

RedForce has been contracted by several local authorities across the country to collect outstanding water, rates and taxes. Its methods have provoked protests at Windhoek, Rehoboth, Walvis Bay, Okahandja and Otjiwarongo, where residents have accused councils of outsourcing their constitutional obligations to a private entity.

“All local authorities which have existing contracts with RedForce are hereby directed not to renew such agreements at the expiry date. Those which have not yet entered into an agreement with RedForce are equally directed not to do so,” the minister says.

‘DOUBLE EXPENDITURE’

Speaking to The Namibian yesterday, Sankwasa confirmed the authenticity of the directive.

“The nation has been crying for so many years about exploitation by this company. For example, if the resident owes a local authority N$500 and this debt is given to RedForce, the company will add for example N$300. The simple question is: If the person is struggling to pay N$500, how will he or she now pay N$800? How?

“Instead of the local authority entering into an agreement with that particular resident so that he or she can pay N$300 and the remaining N$200 paid off in instalments when the resident is accumulating their revenue. This should be logical and humane,” he said.

Sankwasa said local authorities must not use the excuse to hire debt companies because they already employ debt collectors.

“Local authorities have employed debt collectors who are paid a salary every month. If now debt is being collected by RedForce, what are these people employed and being paid for? Because now that becomes a double expenditure,” he said.

He said this method is double expenditure because the municipality has to pay the debt collectors that are permanently employed on their structures and for the services rendered by RedForce.

“Yet the local authorities are struggling to pay their own debt. Why now incur double debt when you are supposed to avoid it? That’s my argument.”

Sankwasa accused some local authorities of having shares in debt-collection companies.

“Some local authorities will argue that debt collection is done well by the external companies, but that’s because they have some shares and receive commission. I am not here for that. We are not here to sell this country.

“Our citizens must enjoy peace in this country. All of us are economically struggling. We must not put people deeper into debt until we drown them,” he said.

COURT CASES

RedForce, co-owned by Zimbabwean businessmen Julius Nyamazana and Selma Nangombe, has been a darling of debt collecting contracts with municipalities and parastatals.

The company has in recent years used lawyer Sisa Namandje to protect its territory by suing institutions that cancel their contracts.

For instance, last year, RedForce won a court case against the Walvis Bay municipality after its debt-collection contract was terminated last April.

In 2024, RedForce co-owner Nangombe claimed the termination of its contract at Walvis Bay was a result of political pressure in an election year.

Nyamazana said his company has recovered over N$1 billion from 10 local authorities since 2014.

Of that, Nyamazana said RedForce has recovered municipal debt of over N$300 million for the City of Windhoek, of which the debt book has grown to N$1.2 billion in 2022.

“When we are working with municipalities, we adopt their credit policies, where some account has fallen into arrears, like after not paying for 30 or 60 days, these credit policies say the account shall be disconnected.”

The company has been accused of a heavy handed approach.

Local Namibian companies have also been pushing back, claiming the job could be done by Namibians.

Last week, activist Shaun Gariseb circulated a message on WhatsApp, warning the City of Windhoek against renewing RedForce’s contract.

He accused the leadership of appointing RedForce without council a resolution and considerations, and that the administrators are ignoring people’s demands.

“Why are they not responding to the request to give us an update on the defective billing system and the RedForce contract that ended yesterday? It’s clear these people have an interest in RedForce. But this is not the response we agreed to in 48 hours. This is a deliberate trick to make it seem like they have responded,” he said.

MOVE WELCOMED

Former Walvis Bay Urban constituency councillor Knowledge Ipinge welcomed Sankwasa’s move.

“This method of debt collection is exploitative. The people must not be pushed into the clutches of debt and dependency. We welcome the move by the minister as this predatory method of debt collection is a violation of human rights,” he said.

Grootfontein social justice activist Benjamin Pablo also welcomed the directive.

“This decision comes as a great relief to many residents who have been under pressure and living in fear due to the aggressive debt collection practices of RedForce.

“For years, our people have cried out about the unfair treatment, the disconnections, and the emotional stress caused by this company, yet no one responded until now,” he said. Pablo is hopeful that the municipality of Grootfontein will follow this directive without delay and seek alternative, people-friendly ways to manage service payments

“Let this be a new chapter of fairness, accountability, and compassion in local governance.

The people of Grootfontein deserve a municipality that understands their struggles and works with them, not against them.”

RedForce Debt Management owner Nyamazama yesterday confirmed to The Namibian that he has not received the minister’s directive.

“It’s premature for me to comment,” he said.

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