Namibia's urban and rural development minister James Sankwasa has ordered the Walvis Bay Municipality to halt its debt collection agreement with RedForce Debt Management. The agreement's legality has come under scrutiny, with Sankwasa directing the council to stop expenditure linked to the RedForce agreement. He also demanded the recovery of funds allegedly wasted through the contract and action on an Attorney General's legal opinion by 30 September.
The municipality's management committee chairperson, Ephraim Shozi, agreed that the agreement is invalid because it was not executed in accordance with the Local Authorities Act. According to Shozi, Section 31A of the Local Authorities Act requires a valid municipal contract to be signed by the chief executive officer and co-signed by the chairperson of the management committee. However, the RedForce agreement was signed by the municipality's general manager of finance, Frans !Gonteb, and acting chief executive officer, John Esterhuizen.
Sankwasa cited an Attorney General's opinion that the agreement was "flawed and not valid". The minister said the fact that the procurement process resulted in an award did not automatically validate the subsequent contract. Sankwasa wrote that reliance on the provision of the Procurement Act award letter is legally fatal as the CEO is only authorised to issue an award and not a contract which is not co-signed as legally required.
Shozi claimed that he had raised similar concerns during his first term as a councillor. He said he had previously moved a motion seeking to separate the municipality from RedForce, which he described as a "divorce", because the agreement had allegedly been entered into without a supporting council resolution. Shozi said he had also sought a formal legal opinion from the Attorney General at the time, but his warnings were dismissed because the IPC-led coalition had outvoted the motion.
The RedForce agreement has also attracted scrutiny over the collection of municipal debts from residents. Sankwasa alleged that RedForce was charging residents additional collection percentages on top of amounts owed to the municipality, raising questions over compliance with the Usury Act 73 of 1968. The minister also questioned the legal basis for RedForce collecting money from residents who have no direct contractual relationship with the debt collection company.
Sankwasa questioned the conduct of councillors and senior municipal officials who he said had continued defending the RedForce agreement. He wrote that the way Councillors and senior staff members defend a legally invalid contract smells of a financial rat. Sankwasa demanded a report from the council detailing the steps taken to comply with his directives and referred to Section 20 of the Local Authorities Act, which prohibits councillors from accepting bribes or commissions.
The dispute also follows a High Court case involving WENA Investment, the Walvis Bay municipality, and RedForce. A High Court order dated 3 September 2026 ordered the municipality to refrain from disconnecting the applicant's water supply and awarded costs to the applicant. Sankwasa criticised the IPC over a statement allegedly issued on 10 September, saying the party "does not care about the sufferings and interest of the Walvis Bay residents".
Key points
- The Walvis Bay Municipality's debt collection agreement with RedForce Debt Management has been deemed invalid due to a lack of proper signatures and non-compliance with the Local Authorities Act.
- Minister James Sankwasa has ordered an investigation into the agreement and demanded the recovery of funds allegedly wasted through the contract.
- The agreement has attracted scrutiny over the collection of municipal debts from residents, with concerns raised over compliance with the Usury Act 73 of 1968.
