By: Abraham Eita
In my recent article on the Bank of Namibia’s repo rate increase, I argued that monetary policy decisions are not just technical matters for economists and bankers.
They affect households and borrowers. That discussion has become even more important as Windhoek residents now face another pressure point: the rising cost of basic municipal services.
Windhoek is becoming more expensive to live in, and the burden is being felt most by ordinary residents.
The Municipal Council of Windhoek has announced an average increase of 4% on services such as water, rates and taxes, sewerage, waste management, refuse removal and the fire brigade levy. These are not luxury services; they are the basic needs of city life.
Before going further, it is useful to explain a few terms in simple language. The repo rate is the interest rate at which the central bank lends money to commercial banks.
When the repo rate rises, banks often increase lending rates, making loans more expensive for households. Inflation means the general increase in prices over time.
When inflation is higher than income growth, people can buy less with the same money.
Municipal tariffs are the charges residents pay for services provided by the City of Windhoek, such as water, waste collection, and sewerage.
These definitions matter because the problem of higher costs of living is not created by one factor only.
It is the result of several pressures happening at the same time. The recent repo rate increase adds pressure on people with loans.
Inflation, currently around 4.4%, reduces the value of money in people’s pockets. Municipal tariff increases raise the fixed cost of living in the city.
At the same time, wages remain low for many workers.
The minimum wage in Namibia is around N$4,000 per month.
In Windhoek, this amount is quickly swallowed by daily expenses.
A worker may spend about N$700 per month on transport alone.
The daily cost of living in the city can be estimated between N$200 and N$450, depending on household size, location and needs.
Even at the lower end of that estimate, N$200 per day amounts to about N$6,000 in a 30-day month.
This already exceeds the minimum wage before considering rent, school costs, medical needs or family support.
This is why the cost-of-living debate must be understood from the household level, not only from national averages.
A 4% tariff increase may look small on paper, but for a low-income household it can mean choosing between settling a municipal bill, buying enough food or paying for transport to work. In economics, percentages can sometimes hide pain.
The real question is not only how much prices rise, but whether people’s incomes can keep up.
The labour market makes this challenge even more serious. Namibia has a population of more than 3 million people, but only about 867,247 people are part of the labour force.
The unemployment rate stands at 36.9%. The employment-to-population ratio is also low, with men at 33.4% and women at 25.2%. This means many households depend on one income earner, while others survive through informal work, remittances, or temporary opportunities.
Urban unemployment is also high, at about 36.4%, while rural unemployment is estimated at 38.0%. These figures show that moving to the city does not automatically guarantee economic security.
Windhoek offers opportunity, but it also demands money every day.
People need transport to search for work, electricity to study or run a small business, water for basic dignity, and food to remain productive.
The recent rising living costs is really weakening household standards of living and their wider economic participation.
Families will now spend most of their income on survival; they will have little left to save, invest, educate their children properly, or support small businesses.
Businesses will also suffer because customers have less spending power. In the long run, these rising costs will slow economic activity and deepen the already existing inequality in the country.
None of this, however, means that the City of Windhoek should not maintain infrastructure or that the Bank of Namibia should ignore inflation risks.
Public services still need to be funded, and inflation controlled.
However, policy decisions must always consider the ability of households to afford. When interest rates, municipal bills, food prices and transport costs rise together, the combined effect becomes too heavy for ordinary residents.
The response should be practical and balanced.
Government and local authorities should focus on strengthening targeted support for low-income households, improving public transport planning, encouraging job creation, and ensuring that tariff increases are linked to visible improvements in service delivery.
The City of Windhoek should also communicate clearly how additional revenue will improve water supply, waste management, sanitation and emergency services.
People are more likely to accept higher charges when they can see better value.
Windhoek is the heartbeat of Namibia’s economy, but it must not become a city where survival is priced beyond the reach of workers and job seekers.
The cost-of-living squeeze is not just a household problem; it is a development issue.
If wages remain low, unemployment stays high and basic services continue to rise, then the city’s economic promise will weaken.
A healthy economy is not measured by trade statistics and GDP figures. It is measured by whether ordinary people can afford to live with dignity, including affording recreational activities.
Furthermore, increasing the cost of basics by those entrusted to provide them shouldn’t be done in isolation and without accountability.
They should also ensure they provide an environment that supports entrepreneurship and job creation.
The same way they come out to announce tariffs, they should publicly come out and detail their efforts on how they are promoting entrepreneurship and job creation. *Abraham Eita is an economist with an interest in housing, fintech, and monetary policies. Email:abrahamheita100@gmail.com
