NAMIBIA

Namibia is a democratic republic with a multi-party system. It is a unitary country divided into three spheres of government comprising of central, regional, and local governments. The president of Namibia is elected to a five-year term and is both the head of state and the head of government. Namibia has a bicameral parliament with the National Assembly as lower house, and the National Council as the upper house, whose members are chosen by regional councils.

Namibia’s decentralisation process began with its independence in 1990, starting from deconcentration and then evolving into delegation and later on to devolution. Article 102 of Chapter 12 of the Constitution divides Namibia into regional and local units and creates provisions for regional and local authorities, establishing that every organ of regional and local government be governed by a council elected every five years. The administration and functioning of regional and local governments are outlined in the 1992 Local Authorities Act (as amended in 2000), the 1992 Regional Councils Act (as amended in 2010) and the 2000 Decentralisation Enabling Act. The most recent elections at regional and local level were held in 2020, where the ruling South West Africa People's Organisation (SWAPO) party’s majority was greatly reduced in comparison to the previous election, including the capital city, Windhoek, lost to the Affirmative Repositioning (AR) movement.

The Regional Councils Act and the Local Authorities Act approved in 1992 are the two key guiding documents for the powers, functions and duties of regional and local government. Following the approval of the acts, Namibia’s official decentralisation policy was launched in 1998. The policy provided guidance on how decentralisation was to be undertaken by identifying the functions to be decentralised and outlining resource strategies to do so. The Decentralisation Enabling Act was subsequently enacted in 2000 and functions as the presiding legislative tool on decentralisation. The Trust Fund of Regional Development and Equity Provision, created in 2000, provides for financial and technical assistance for the development of regional and local authorities and supports the implementation of decentralisation programs in Namibia. The Association for Local Authorities in Namibia (ALAN) was formed before the country’s independence, to advocate on behalf of local authorities.

In 2010, an amendment to the Regional Councils Act allowed the president of the Republic of Namibia to directly appoint regional governors to oversee the exercise of any executive function of government in each region. Prior to 2010, the regional governors were democratically elected. The 2010 amendment recentralised power around the activities of central government. Regional governors serve as links to improve communication and coordination between the central government, the regional council, local authorities and traditional authorities. Central government ministries are also encouraged to establish a greater regional presence through decentralised service delivery outlets.

The Ministry of Urban and Rural Development is the central government agency that is primarily responsible for the implementation of the decentralisation policy through its directorate of decentralisation coordination.

As of 2021, no central government activities have been devolved completely to regional councils. However, according to public government gazette documents, some functions have been decentralised in accordance with the Decentralisation Enabling Act's delegation phase.

TERRITORIAL ORGANISATION
MUNICIPAL LEVEL	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2021)
57 local councils (3 Part I municipal councils, 10 Part II municipal councils, 26 town councils, 18 village councils)		14 regions
Average municipal size: 44 577 inhabitants
57		14	71

OVERALL DESCRIPTION: Namibia has 57 local governments and a regional level of government. The country is administratively divided in 14 regions governed by 14 regional councils. The local government level is subdivided into four categories: three “Part I” municipal councils (Windhoek, Walvis Bay and Swakopmund), 10 “Part II” municipal councils, 26 town and 18 village councils. A municipal council is also referred to as a “city”. Town and village councils may progress to municipal councils and town councils, respectively, if the president determines that they have sufficient “capacity and financial resources”.

The Constitution allows changes in the administrative division of Namibia provided that such changes are in accordance with the recommendations of the Delimitation Commission (Art. 103). The current administrative division in 14 regions is the result of the work of the Fourth Delimitation Commission, tabled in 2013 where the number was increased from 13 to 14. The regional councils are further subdivided into 121 electoral constituencies, which are administrative circumscriptions and not subnational government entities.

REGIONAL LEVEL: The Constitution grants the regional councils the power to a) elect members to the national council; b) exercise executive powers within their respective region; c) raise revenue and d) exercise powers to perform any other function and adopt by-laws. The Regional Councils Act further creates provisions for the creation of a council in each region. Regional councillors are directly elected by their constituents who cast votes for individual candidates nominated either by political parties or as independents. The members of the region’s council serve the council for a period of five years. The regional governor is the political head of the region, and is appointed by the president. The regional council elects from amongst its members the members of management committees, which are vested with executive powers. The region’s management committee is led by a chairperson who is elected by members of the regional council at the time they elect the management committee. The chairperson of the management committee and the other members of the committee hold office for three years and both positions are eligible for re-election. The regions are administered by the chief regional officer who is responsible for carrying out the council’s decisions and directing the administration of the council’s affairs. The chief regional officer is appointed by the regional council, in consultation with the minister.

The regions of Namibia vary greatly in size, population and population density. The largest region by area is the ||Karas Region, which is 161 514 km². This region is also the least dense region, with a population of only 0.5 inh./km². The smallest region is the Oshana Region, which is 1/20^th the size of ||Karas, at only 8 647km². The most populous region is Khomas, which is centred around the country’s capital, Windhoek.

MUNICIPAL LEVEL: The Local Authorities Act also creates provisions for the establishment of councils as governing bodies of local authorities. There are three different types of local government: municipalities, villages and towns. The president determines the categorisation of local authorities based on its financial resources and its capacity to deliver services. Municipalities have more powers and functions than towns, which in turn have more powers and functions than villages.

Each local government entity is governed by a council of seven to 15 members, depending on the subcategory it is classified in. Members of local authority councils are elected from party lists during the general elections and hold office for five-year terms according to Namibian electoral provisions. In the specific case of municipal and town councils, a mayor and deputy mayor are elected by the council from the appointed council members. The mayor, together with the council, formulates development policies, monitors the implementation of policies and accounts to the inhabitants of the municipality. In village councils, a chairperson and vice-chairperson are elected by the council from the appointed council members. Like regional councils, municipal and town councils have management committees that are the executive arm of the council and are comprised of the mayor, deputy mayor and up to five other councillors, depending on the size of the council. The council may establish as many management committees as it deems necessary to advise it on the exercising of its powers.

According to demographic statistics from 2011, the three Part I municipal councils vary in population from 325 858 in Windhoek to 44 725 in Swakopmund. The Part II municipal councils are significantly smaller, and in 2011, varied between 28 249 people (in Otjiwarongo) to 4 720 (in Henties Bay). The town councils range from less than 1 000 inhabitants in Nkurenkuru to 63 431 in Rundu in 2011.

HORIZONTAL COOPERATION: The Association for Local Authorities in Namibia (ALAN) provides opportunities for research on local authorities in Namibia, and for knowledge sharing between local authorities. ALAN is also a member of numerous international fora where there are opportunities to learn from other subnational government associations, and share knowledge on lessons from the Namibia experience of subnational governance.

The 1992 Regional Councils Act states that regional councils may provide basic services, and the 1992 Local Authorities Act outlines the functions decentralised to local authorities, which vary according to grading (Part I or Part II municipalities, towns or villages). Part I and II municipal councils are in charge of public transport and housing provision, and can partner with the private sector in ventures without ministerial permission. Town councils have fewer functions than municipal councils, but more than village councils.

The 1998 Government of Namibia’s Decentralisation Policy identifies 28 functions to be decentralised to regional councils and local authorities. The decentralisation policy lists a broad range of functions to be devolved to regional councils (including community development and early childhood development; administration of villages and settlement areas; rural water development and management; management and control of communal lands; primary healthcare; pre-primary education among other functions) and local authorities (including traffic control; vehicle testing and licensing; community development; responsibility and accountability for electricity distribution; town planning schemes within the framework of approved master plans among other functions). Functions that have been decentralised to regional councils include provision of rural water, electricity and sewerage services, management and administration of resettlement farms; management and control of communal lands; land acquisition and land use planning, primary and secondary education, disease prevention and health promotion; disease control; community-based social welfare services.

The process of decentralisation in Namibia is ongoing, and research has indicated that there is both a lack of political will from central government to fully devolve responsibilities as envisaged in the original SWAPO Election Manifesto presented in 1989, but also that there appears to be a lack of capacity within the central government’s line ministries to develop action plans and execute them in order to facilitate the necessary decentralisation. There are some functions that have been gazetted as decentralised to local authorities but are in reality still implemented by the central government’s relevant line department.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Regional level	Municipal level (municipal councils)	Municipal level (town and village councils)
1. General public services (administration)		Public buildings and facilities (construction and maintenance); Vehicle testing and licensing	Public buildings and facilities (construction and maintenance); Vehicle testing and licensing
2. Public order and safety		Traffic control	Traffic control
3. Economic affairs / transports	Road networks and facilities (regional); Energy (electricity, gas, etc.); Maintenance of regional infrastructure; Small miners’ development	Road networks and facilities (regional); Energy (electricity, gas, etc.); Maintenance of regional infrastructure; Small miners’ development	Urban roads networks and facilities (local); Support to local enterprises and entrepreneurship; Tourism; Commerce; Energy (electricity, gas, etc.)
4. Environment protection	Forest development and management; Conservation	Forest development and management; Environment and conservation	Environment and conservation
5. Housing and community amenities	Resettlement, rehabilitation and housing; Urban and land use planning; Urbanism; Rural water supply; Management and control of communal lands; Land valuation and acquisition; Surveying and mapping of lands	Resettlement, rehabilitation and housing; Urban and land use planning; Urbanism; Water supply; Management and control of communal lands; Land valuation and acquisition; Surveying and mapping of lands; Community development	Public Lighting; Housing (subsidies, construction and renovation and management); Urban and land use planning; Community development
6. Health	Primary healthcare	Primary healthcare
7. Culture & Recreation	Libraries	Sports and recreation; Libraries; Museums; Cultural activities (theatres, exhibition halls, zoos, botanical gardens, etc.); Religious affairs	Sports and recreation; Libraries; Museums; Cultural activities (theatres, exhibition halls, zoos, botanical gardens, etc.); Religious affairs
8. Education	; Pre-primary and primary education; Secondary education; Special education (adult education)	; Pre-primary and primary education; Secondary education; Special education (adult education)	Childhood development; Pre-primary and primary education
9. Social Welfare	Community Development and Early Childhood Development;	Social services schemes (orphanages, street children and disability programs)	Social services schemes (orphanages, street children and disability programs)

Scope of fiscal data: local authorities, excludes regional councils

SNA 2008

Availability of fiscal data: Low

Quality/reliability of fiscal data: Low

GENERAL INTRODUCTION: Local authorities have the authority to prepare their own budgets, after consultation with their respective regional council. Budgets are, nevertheless, subject to approval by the relevant minister in the central government and no expenditure may be incurred without such approval. Thus, the autonomy of local authorities is limited.

The audit performance of the central government of Namibia is below international standards, according to the auditor-g‑eneral reports for the year ended 31 March 2020. The reasons for this are an absence of a financial reporting framework and the use of a cash-based accounting system, as opposed to an accrual-based system. The auditor-general produces audit reports for local authorities and regional councils, although that they lack skilled employees, reveal poor resource management and weak financial systems. Even the capital city of Windhoek is unable to produce audit reports that the auditor-general could use as the basis for an audit opinion in 2020.

Data on the revenue and expenditure of local authorities and regional councils is compiled, assessed and published by the auditor-general of Namibia. However, this data is often unreliable, and is not presented in a consolidated form.

ⓘ No detailed data available for this country

EXPENDITURE: Local government in Namibia have low levels of expenditure, despite the fact that there have been some responsibilities that have been decentralised to them. The most recent publicly available consolidated figures on the expenditure of local authorities published by the Commonwealth Local Government Forum (CLGF) are for 2015 and indicate that they only represented 6.4% of general government expenditure. Compensation for local government personnel accounted for 27% of total expenditure for local authorities in 2015. In 2020, the City of Windhoek spent 39% of its revenue on staff related costs. This is the largest single cost item, followed by bulk purchases at 33%.

DIRECT INVESTMENT: The level of infrastructure investment by local authorities is generally low. From a direct investment perspective, local authorities and Namwater (the centrally government owned water and sanitation parastatal) invest more in water and sanitation than other functions allocated to local authorities. The City of Windhoek spent NAD 115 million on direct investment for the year 2020, representing only 2.5% of the council’s total expenditure.

ⓘ No detailed data available for this country

According to available fiscal data from 2015 from the CLGF country profile on the local government system, water services account for 13% of local government expenditure, whereas roads account for 6%. Spending in these two sectors totalled USD 54 PPP per capita in FY 2014-2015. For the 2020/21 financial year, NAD 1.6 billion or 2.7% of total public expenditure by general government was allocated to support increasing provision for sanitation infrastructure, land servicing and bulk water, sewage and electricity supply services across the country. More recent data and the rest of the breakdown of local government expenditures by economic classification is unknown.

ⓘ No detailed data available for this country

OVERALL DESCRIPTION: Tax revenue accounted for 52.4% of general government revenue in 2020. In Namibia, data from the CLGF showed that tax revenue accounted for about 8% of the country's subnational revenue, while grants and subsidies accounted for about 21% of local government revenue in 2015. On average, Part I municipalities have more sophisticated financial systems in place than the rest of the local government subcategories, and they enjoy significant autonomy in terms of property tax determination and lending under the provisions of the Local Authorities Act. According to available data, 70% of municipal revenue is classified as "other revenues," with no clear indication of distinctive revenue sources.

TAX REVENUE: Local governments can charge taxes to their citizens, including property taxes but excluding income tax, general sales tax, and additional sales levies. The base and rates used to determine the level of property rates are set by the local authorities themselves, without approval of the central government. Taxes are regulated by the Ministry of Regional and Local Government, Housing and Rural Development but the countrywide amount of money raised by subnational governments is unknown. The City of Windhoek earned 13.8% of its revenue from property rates in 2020.

It is established by law that local governments must send 5% of their property tax income to their regional council. There is evidence that local authorities sometimes fail to pay the regional councils, which has a negative impact on the implementation of small capital projects in the regions.

GRANTS AND SUBSIDIES: The majority of city and town councils are unable to balance their accounts without significant transfers from the central government or donors, thus limiting their financial autonomy. However, Part I municipalities are substantially less reliant on transfers than Part II municipalities because they have a larger revenue base from which to extract their own revenues. For example, transfers represented only 2% of revenue for the City of Windhoek in 2020. Part II local authorities have weaker and often fragmented financial management systems and, unlike Part I municipalities, are subject to oversight from the Ministry of Urban and Rural Development.

Transfers from the central government are either dedicated to specific capital projects for infrastructure or general operational expenditure. The state also offers some grants for infrastructure upon application from councils. All capital support grants are project-specific, while operational grants are general. In addition, the central government provides subsidies to village councils, regional councils and newly established town councils that do not have sufficient revenue base. In 2021, the Ministry of Urban and Rural Development stated that there are plans transfer resources to subnational

governments through a Recurrent and Development Grant System on a formula basis so as to “enhance subnational discretion to plan, prioritise and allocate funds in a manner that balances locally defined needs and national priorities” (IPPR, 2021). The current lack of a formula-based system leads to the under-funding of some regions and the over-funding of others, and curtails the regions’ ability to fulfil the prescription of providing similar services in all settlement areas.

OTHER REVENUE: Local governments levy fees and tariffs for services performed, such as solid waste removal. However, due to poor data availability and management on service users, payment for such services may not be collected successfully.

ⓘ No detailed data available for this country

FISCAL RULES: The auditor-general, who is appointed for periods of five years (renewable by the president) in accordance with the Constitution (Art. 127). Key responsibilities of the office of the auditor-general, derived from the 1991 State Finance Act, include the audit of the financial statements of regional, municipal, town and village councils. The auditor-general is required to report the results of all audits to the national assembly and make recommendations aimed at improving financial management, controls and use of resources. All such reports are accessible online, although they can be made available up to one year after, and are not presented in consolidated form.

While Part I municipalities may borrow from Namibian banks without permission from the central government, Part II municipalities, towns and villages may borrow only with the approval of the responsible ministry in the central government.

DEBT: According to the Local Authorities Act, local governments can borrow money through loans, debentures, bills of exchange, and other negotiable instruments. Regional councils have the same borrowing capabilities as municipalities under Article 33 of the Regional Councils Act. Under the rules of the Local Authorities Act, Part I municipalities can also take on loans. For example, the City of Windhoek had NAD 140 million of outstanding long-term debt at the end of the 2020 financial year, representing only approximately 3% of annual expenditure. General government debt in NAD 116 billion in 2020, approximately 66% of GDP. The total amount of outstanding loans for local authorities at the national level is unknown.

TERRITORIAL MANAGEMENT OF THE CRISIS: On 17 March 2020, the president of Namibia declared a state of emergency, in response to the COVID-19 pandemic. The declaration was based on the provisions of Article 26(1) of the Namibian Constitution, read together with section 30(3) of the Disaster Risk Management Act, 2012 (Act No. 10 of 2012). In 2020, the Namibian government activated a National Health Emergency Coordination Committee under the Ministry of Health and Social Services (MOHSS). The government furthermore introduced the Incident Management System (IMS) and strengthened the functionality of the National Public Health Emergency Operation Centre (NPHEOC), which has become the central base from where all COVID-19 responses at the national level are operating.

The Namibian president ordered the National Security Cluster – an existing body made up of Namibia’s Defence Force, Police Force, Central Intelligence Service, Correctional Service, Immigration, Customs and Excise, local police services and supported by the Ministry of Health and Social Services – to immediately enforce national COVID-19 regulations, directives and preventive measures throughout the country.

Leveraging off their existing relationship, the United Nations and the government of Namibia developed a framework to respond to the COVID-19 pandemic. Namibia’s 14 regions were divided into 10 zones to manage the spread of COVID-19. The country and each of these zones went through different stages of lockdown with regulations issued by the president. At times, some regions were at different stages of lockdown. For instance, the regulations issued on 29 May 2020 extended the stage 1 lockdown for the Walvis Bay local authority area from until 8 June 2020, while the regulations issued on 8 June 2020 extended the stage 1 lockdown for the Erongo Region until 22 June 2020. The local police forces in the regional councils were responsible, in part, for maintaining adherence to the laws implemented by central government.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: Three major sets of measures were introduced in response to deal with the social and economic consequences of lockdown: monetary policy measures (by the Bank of Namibia), fiscal measures (by the Ministry of Finance) and labour market measures (by the Ministry of Labour) in addition to the health measures introduced and overseen by the MOHSS.

The central government announced several interventions to ease the economic burden on residents and businesses. This included a three to six-months Pay-As-You-Earn tax holiday for qualifying firms, an increased personal income tax exemption for those in the previous 18% bracket to individuals in the 25% bracket, the zero-rating of materials, equipment and services relating to the fight against COVID-19 and the deferral of tax penalties.

Due to the unitary structure of Namibia’s multilevel government system and the centralisation of the health functions, local authorities and regions played a supporting role to the centrally coordinated response to the pandemic. Local Authorities and regions supported Namwater in the provision of sanitation and hygiene facilities, spending approximately NAD 72 million (USD 9.8 million PPP) during 2020 on emergency hygiene responses to the COVID-19 pandemic. According to the regulations, regional councils were responsible for identifying and setting aside hospitals and health facilities that meet the minimum set of standards of care and treatment of COVID-19.

Local authorities were tasked with setting up local-level interventions, including assisting of the vulnerable and the poor. Some of the responses of local authorities included the provision of water, sanitation and hygiene services, coordinating local philanthropic interventions (particularly with respect to food and housing), distribution of appropriate personal protective equipment to vulnerable groups, and the enforcement of the law.

The Windhoek Municipal Council adopted a series of measures in the early stages of the pandemic. This included community awareness campaigns, increased maintenance of sanitation and hygiene facilities, closing of community facilities, increased supply of water to areas currently not provided, enforcement of central government laws and reduction in allowable hours for alcohol sales.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: The central government’s tax revenue entails taxes on income and profits (company taxes), taxes on properties as well as taxes on goods and services, among others. The closing of most shops that did not sell essential products such as clothing, automotive and others, due to the lockdown, caused a reduction in the total value added tax (VAT) revenue that would have been charged on the sales of goods, and a reduction in taxes from imported goods.

General government revenue decreased by 6.1% from 2019 to 2020 as a result of the global pandemic, with expenditure execution (i.e., the proportion of budgets actually spent) decreasing to 91.3% for operational expenditure, and 82.2% for direct investment. This is primarily due to the deferral of expenditure as a result of the lockdowns. Within central government, there was significant reallocation of resources to the MOHSS to provide sanitary and social responses to the pandemic.

There is no data available on the impact of the COVID-19 pandemic on the financial situation of local authorities.

ECONOMIC AND SOCIAL STIMULUS PLANS: On April 1 2020 the government launched the Economic Stimulus and Relief Package to mitigate the impact of COVID-19 (NAD 9.1 billion or 5.2% of GDP). This included NAD 1.1 billion additional spending on public health, one-off emergency income grant (EIG) of NAD 750 per qualifying person costed at a total of NAD 576 million which had been received by 769 000 Namibians by March 2021; a wage subsidy for the hardest hit sectors of the economy to help businesses retain employees at an estimated cost of NAD 400 million. The National Employment and Salary Protection Scheme for COVID-19 was launched on 10 April 2020 in collaboration with the Social Security Commission.

The Governance and Economic Recovery Programme was launched in February 2021. It is funded primarily by a 15-year loan from the African Development Bank for NAD 1 470 million (USD 199 million PPP). The areas of focus are fiscal sustainability, private sector-led agriculture and industrial-sector transformation, and economic and social inclusion.