Walvis Bay Rural councillor, Tegako Donatus, was granted bail of N$50,000 by the Swakopmund Magistrate's Court, following his arrest on charges of fraud and money laundering.
According to a police report, the Independent Patriots of Change (IPC) councillor was taken into custody on Monday.
He stands accused of the unauthorised spending of N$116,000 from the account of the Erongo Regional Council.
As part of his bail conditions, Donatus is required to surrender all travel documents before release and has been instructed not to interfere with ongoing investigations or witnesses.
The case was postponed to the 29th of October.
The IPC restrained Donatus from performing any council duties three weeks ago, citing an investigation into alleged unauthorised spending.
The IPC issued a statement on Tuesday, indicating that the leadership is still gathering comprehensive details on the charges Donatus faces.
In a statement, the party said it would ensure that Donatus' constitutional rights are fully protected throughout the judicial process.
The party called on the public and supporters to remain calm and refrain from speculation while allowing the legal system to run its course.