Staff Writer
The Windhoek High Court is set to rule today on finance minister Ericah Shafudah’s appeal over the lawsuit by microlender Entrepo Finance over the government’s payroll deduction system (PDMS). The ruling will be made at 09h00.
PDMS allows civil servants to repay loans directly from their salaries.
This comes as, on 28 August 2025, the Ministry of Finance issued a directive to end discretionary payroll deductions on the system from 30 November.
The ministry at that time said only existing loans would continue, while statutory deductions such as tax and pension contributions would remain.
Entrepo challenged the decision through an urgent application, arguing that the move to remove deduction codes was “irrational, irregular and unreasonable”.
It asked the court to keep the system running while the decision is being reviewed.
In November last year, High Court deputy judge president Hannelie Prinsloo ordered that the system continue operating.
She directed the minister not to interfere with the loading of new deductions and said the PDMS must remain in place, with or without the previous service provider, Avril Payment Solutions.
In her appeal, Shafudah said her leave to appeal focuses on the clarity of the High Court order. She said the order does not explain how the system should operate after Avril’s contract ended or who must carry it out.
She also raised concerns about data problems during the system transition. Officials found more than 70 770 records from Entrepo that did not match Avril’s data, along with other issues that prevented the data from being imported.
The ministry said bringing the system under government control could save about N$11.5 million per month.
Meanwhile, the Bank of Namibia (BoN) raised concerns about limited access to the system, noting that fewer than 12 microlenders have direct access out of more than 860.
Namfisa said discretionary payroll deductions do not comply with lending rules and must follow affordability requirements.
Entrepo later returned to court, saying it could not access the system after the ministry took over.
The company said more than 70 000 deductions due in December were not processed and accused the minister of failing to comply with the court order.
It sought to have the minister held in contempt of court and asked that she explain under oath how the system would be kept functional.
In December, acting judge Lotta Ambunda dismissed the application with costs.
She said the evidence did not show that the system had stopped working.
She said Entrepo had not shown which parts of the system prevented it from loading new deductions.
Entrepo then filed a notice of intention to appeal, arguing that the court misread the earlier order. It said the evidence showed the minister had not put in place a system that allowed it to continue operating.
It said there are reasonable prospects that another court could reach a different decision.
Entrepo has also indicated it plans to file another application to compel the minister to provide more documents and will seek directions from the court.
The court’s decision today will determine whether the minister can proceed with her appeal.
