Council in debt trade off

Sifundiso Ndlovu Chronicle Reporter
Bulawayo City Council has offset $2,4 million of government’s debt at a time when the municipality’s monthly revenue collections continue to dwindle. According to the latest council minutes, government owed council $5,6 million which has since been reduced to $3,2 million.

Bulawayo Mayor, Councillor Martin Moyo told Chronicle yesterday that council and the government had traded off their accumulated debts.

“As council there are statutory obligations we must honour to the government which are traded off with the debt government owes us,” said Clr Moyo before referring further questions to the council finance and development committee chairperson, Clr James Sithole.

Clr Sithole said the understanding that they had reached with the government was a timely reprieve for the local authority as March monthly revenue collections declined from $6,6 million to $5,8 million, a 12 percent decrease when compared to the same period last year.

“The set-off is well timed as we are struggling as council to collect as much as we could due to difficult economic conditions,” said Clr Sithole.

“The set-off is beneficial to the council as it reduces council indebtedness as well as ensure that council can implement its budget without being garnished by Zimra,” said Clr Sithole.

Council is owed about $82 million, $39 million by residents closely followed by industry and commercial debt of $37 million.
Clr Sithole said although government was honouring its obligations, some businesses were not coming forward to settle their dues forcing council to seek legal recourse.

Bulawayo Progressive Residents Association advocacy and programmes officer Emmanuel Ndlovu urged council to strengthen its internal mechanisms to maximise revenue collection.

“There are many loopholes and laxity in council’s internal mechanism which is an ingredient for failure. We see drinking water leaking and council properties are leased to people who don’t pay rates. I think it is high time council start the incentives they promised for paying residents,” said Ndlovu.

He urged government to offer council grants as the debt set-off would barely help the financially distressed councils.
“Central government should do more. I feel the debt set-off is a drop in an ocean which may not help much in alleviating challenges facing councils,” said Ndlovu.