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Yeukai Karengezeka Herald Correspondent
Chitungwiza Municipality ‘s financial problems are worsening, amid reports that it owes creditors $74,8 million as of January this year, while it is battling to collect $71,6 million owed by ratepayers.
Most of council’s debt relates to outstanding salaries.
Recent minutes of the Finance Committee show that the amount owed to creditors increased by $2,6 million in January.
“Total creditors as at 31 January 2019 increased to $74 705 682, 40 compared to $72 069 309, 82 the previous month,” read the report.
“The major cause of the increase in the sum owed to creditors is salary-related expenses.”
The debt also comprises statutory obligations which have the highest amount of $40 999 826, City of Harare $11 123 158 and others $22 701 278.
Finance director Mrs Evangelista Machona reported that they made third parties payment of $215 250 during the same month. Council is making daily payments to Zimdef $750, LAPF $1 000, Urban Councils Pension Fund $1 000, City of Harare $5 000, while Zimra and NSSA are paid $45 000 and $90 000 monthly, respectively.
“Most of our collections are going towards financing legacy debt as evidenced by various payment plans we have entered into,” he said.
“Prices of most products are sky rocketing, while we have maintained our budget.”
Mrs Machona said council collected 49 percent of its expected revenue in January. The amount had increased to $1,5 million compared to the previous month due to ratepayers’ commitment to paying their bills.
“Revenue collected for January has increased to $1 535 865 from $1 044 180 collected during the previous period,” he said.
“The increase is attributed to revenue for land sales to Pathway Primary School amounting to $344 145. Of the money collected during this period, $1 003 149 was available to finance council’s operating costs.”
Mrs Machona said council was now using its credit control and legal section to make a follow up on defaulters.
Online Reporter