adminNyemudzai Kakore Herald Reporter
Harare City Council will not meet its annual revenue target of US$276 million this year, having collected only US$138 million in the last 10 months to October.
The city council has since revised downwards its 2014 revenue target to US$151 million, with at least US$12 million being collected per month.
Last year, the city’s revenue collection was US$156 million.
Presenting the 2015 budget proposal last week, chairperson of the Finance and Development Committee councillor Tranos Moyo said the city’s performance in revenue collection was poor compared to last year. He said out of the new US$151 million target, the city will channel at least 48 percent towards employment costs, while about 52 percent will be projected to fund service delivery programmes.
Clr Moyo said council was owed at least US$294 million by residents in bills and rates which obstructs its efforts in revenue collection.
“It is projected that US$151 million will be collected by December 31, 2014,” he said. “The country is experiencing low capacity utilisation, inflation that borders on deflation. High rate of unemployment and liquidity challenges impact have seen the manifestation of increased debtors in the books of council.”
Clr Moyo said this also impacted on the city’s failure of clearing its debt of US$220 million.
“Our debts stood at US$294 million as at September 30, 2014 against a creditor position of US$220 million,” he said. “Of the US$220 million owed to creditors, US$122 million relate to employment costs in the form of statutory instruments.”
Clr Moyo said the city needed to cut the amount of revenue channelled to salaries and improve service delivery by being consistent with the prescribed ration of 30:70.
Government requires that only 30 percent of revenue collected by councils be channelled towards salaries, while 70 percent goes to service delivery.
Clr Moyo said employment revenue was exhibiting a downward trend from 96 percent in 2009 to 48 percent in 2014 as they had managed to whittle down a number of employees on the city’s payroll from 10 610 to 9 271.
“Council continues to strive towards the attainment of the prescribed ratios set by the Minister of Local Government, Public Works and National Housing of 30:70 between employment cost and service delivery,” he said.
“Council embarked on a departmental restructuring exercise and staff rationalisation, this exercise projects the salary bill will go down by approximately US$1,3 million per month translating into an annual saving of about US$15 million on employment costs.”
Before the restructuring and rationalisation programme, the city’s 18 directors were gobbling US$500 000 in salaries monthly at a time service delivery was plummeting.
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