Government, business, residents owe Harare $1,4 billion

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HARARE City Council is owed a staggering $1,4 billion by residents, business and government, principal communications officer Innocent Ruwende has said.

This is attributable to a hardening economic environment in the country, which is characterised by reduced disposable income for residents and hyper-inflation.
Harare’s debtors’ book grew last year from $870,4 million to $935 million, with commercial debtors owing the largest amount of $401 million.

“Debtors now owe council $1,4 billion. High density suburbs owe $359 million, low density suburbs owe $504 million, industry and commerce owe $529,7 million and government owes $38,5 million,”Ruwende  said.

He added that the debts were as a result of continued low levels of disposable income from residents who were mostly in the informal sector.
Ruwende, however, highlighted that in order for services to be provided, ratepayers needed to play their part and pay their bills.

“Water needs chemicals which are mostly bought in foreign currency. Refuse needs to be collected and the trucks require servicing and fuel.

“If ratepayers do not pay anything, services are affected and they end up blaming the local authority. It is important that everyone pay their dues for the city to continue providing what it is mandated to at law,” he said.

Finance committee minutes note that council collected $416 million in 2019, while land sales for the year brought in $82 million.
Council was given a grant of $15,2 million for road maintenance and received a further $30 million from the government for the city’s water and sanitation expenditure and development of markets.
The minutes also noted that another inter-governmental fiscal transfer of $23 million was paid directly to Zimphos to settle a water chemicals debt.
“2019 debtors grew on average at a decelerated rate of $5,4million against 2018 monthly growth of $9million. Whilst the trend had improved, it called for more robust debt collection strategies to reduce the current and legacy debt. Creditors surged to $634million despite a debt write off from Zimra of $135,1 million and a closing position of $490,7million December 31, 2018.
“The rise was largely attributed to two major cost drivers, electricity and water chemicals. Outstanding liability for Zesa amounting to $200million at 2019-year end remained insurmountable regardless of the concerted effort made by the city monthly to make payment as tariffs kept on going up every three months,” read part of the minutes.
They also highlighted that there was need to negotiate with Zesa Holdings a sustainable tariff for Morton Jaffray Water Works, which was a major consumer of electricity.

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