Rundu: The Rundu Town Council (RTC) has launched a commercial subsidiary, Rundu Town Council Commercial Services (Pty) Ltd, to generate additional income and reduce pressure on the council's finances. The company was launched during the fourth Rundu Mayoral Business Forum held here on Friday.
According to Namibia Press Agency, RTC's Strategic Executive for Community Services, Francisca Kupembona, emphasized that the establishment of the subsidiary would help the council diversify its sources of income and support the delivery of municipal services. The RTC has faced challenges with revenue collection due to large unpaid municipal bills accumulated by residents, businesses, and other account holders.
The council's 2024 annual report indicates a significant increase in its debt book, rising from approximately N$345.8 million in June 2023 to N$427.6 million in June 2024, marking a 23.6% increase. Kupembona highlighted that Rundu's rapidly growing population has intensified demand for services such as water, electricity, and infrastructure, while traditional revenue sources remain inadequate.
Kupembona stated that the council's Integrated Strategic Business Plan, adopted in 2022, identified the necessity to broaden its revenue base. She explained that the subsidiary company was conceived to pursue viable opportunities for generating revenue, including seeking business partnerships, attracting investments, and operating services in a business-oriented manner.
The subsidiary aims to alleviate pressure on the council's ordinary budget by allowing commercial activities to generate their own income. Kupembona noted that Namibian law permits local authorities to commercialize certain services, functions, or duties through a company, subject to necessary approvals and conditions.
Prime Minister Elijah Ngurare, in a statement read on his behalf, cautioned that the success of the company would largely depend on good governance. He stressed the importance of responsible management to ensure that the company benefits the town and its residents.