Online Reporter
Sikhumbuzo Moyo [email protected]
BULAWAYO City Ward Five councillor Dumisani Nkomo has proposed the establishment of a municipal bank to provide affordable, long-term financing for local authorities battling to rehabilitate ageing water infrastructure.
Cllr Nkomo said the bank could be established by at least five local authorities and would form part of a five-pronged financing model aimed at closing the huge funding gap confronting municipalities.
He made the proposal while presenting a paper on Water Financing, Devolution and Local Governance at the inaugural Zimbabwe Water Indaba organised by the National University of Science and Technology (Nust) in Bulawayo.
The three-day indaba ends today.
Cllr Nkomo said local authorities had a constitutional and statutory obligation to ensure residents had consistent access to clean, safe and affordable water, but were being hamstrung by inadequate financial resources and ageing infrastructure.
“The capacity gap in terms of sustainable water infrastructure is huge. The City of Bulawayo needs almost US$1 billion to rehabilitate its ailing water infrastructure,” he said.
He said the deteriorating state of the city’s water infrastructure had also resulted in significant losses of treated water through leakages.
According to Cllr Nkomo, Bulawayo loses approximately 48 percent of its treated water through non-revenue water, further worsening pressure on the city’s already stretched water system.
He proposed a financing architecture built around internally generated revenue, blended financing, municipal bonds and a municipal bank, supported by an enabling governance and devolution framework.
Cllr Nkomo said internally generated revenue, mainly from property taxes and water bills, remained the main source of municipal income but was insufficient to meet the huge capital requirements for water infrastructure rehabilitation.
He said Bulawayo’s water account contributed about 30 percent of the city’s total revenue, but remained inadequate to fund the scale of infrastructure investment required.
The proposed municipal bank would provide local authorities with access to longer-term and potentially more affordable financing for major infrastructure projects, reducing their reliance on short-term funding sources.
Cllr Nkomo said the financing model would require cooperation among local authorities, central Government and other stakeholders to ensure municipalities had the resources needed to fulfil their water service delivery mandate.
