Chronicle Editor
Innocent Ruwende Senior Reporter
Local authorities have condemned their parent ministry for suspending their borrowing powers saying the decision will not only cripple them, but will also scuttle existing and future development projects aimed at improving cities and towns.
Councils, which are owed $1 billion by ratepayers, said most of the new housing projects and sewer expansion and rehabilitation programmes cannot be funded by ratepayers, who are finding it difficult to pay their bills given the current economic situation.
Secretary for Local Government, Public Works and National Housing, Engineer George Mlilo disclosed at a meeting with Midlands private land developers recently that almost all local authorities were in the red and were struggling to service their debts hence the decision to suspend borrowing powers. Kadoma Mayor and lawyer Muchineyi Chinyanganya said the decision was absurd as Government itself is not fulfilling its obligations to councils.
“Firstly, Government is surviving on borrowing. Secondly, it is supposed to be remitting at least 5 percent of the National Budget to the local authorities as per the Constitution and since 2013, no cent has been received,” he said.
“With the current state of the economy and high levels of unemployment many residents are finding it difficult to pay their bills to councils, but they expect services. “Borrowing helps to cover the gaps that are created by residents and companies that are not paying. At the end of the day its service delivery that matters.” Masvingo Mayor Hubert Fidze said the decision would cripple his council’s water and housing projects.
“We borrowed $60 million loan from China so that we can increase our water supply to 60 mega litres a day from Lake Mutirikwi. We want to construct a new plant and this decision will hamper our programme especially since Government is the guarantor of such loans,” he said.
“It would also affect our efforts to expand our industry and housing projects which are mainly funded through loans,” he said. Mutare Mayor Tatenda Nhamarare said given the prevailing economic situation, councils cannot survive without borrowing.
“It is a bit unfair considering the economic challenges that we are facing, there is nowhere local authorities are going to function without borrowing,” he said. Urban Councils Association of Zimbabwe (Ucaz) president and Harare mayor Councillor Bernard Manyenyeni said councils should be allowed to borrow if they are bankable and viable.
“Councils should borrow not because they simply have collateral. It is not even good banking practice. Councils should borrow because they are bankable and viable. Look, we have just bought garbage compactors which can be grounded because they won’t have diesel,” he said.
“The sooner councils realise that they are financial institutions first and foremost the better. We have no time for bookkeepers we need financial managers.” Bulawayo Mayor Martin Moyo said local authorities already had rules that govern how they access funding and no local authority has borrowed willy nilly.
“Where there was need to borrow, we have applied for borrowing powers. “Those powers can be given or denied. So for me there is no issue. Governance is about systems and not emotions. Emotions upset and shroud good judgement,” he said.
He said there was need for research before making such decisions. The country’s local authorities have been failing to provide adequate service delivery in recent years mainly due to limited revenue inflows. Councils rely on various service providers to supply them with chemicals to purify water and spares, but they are struggling to collect what they are owed and as a result service delivery has gone down rapidly .
Online Reporter