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Municipal Reporter—
Government has rejected Harare City Council’s $448 million budget for 2017 because it is too high and unrealistic. Local Government, Public Works and National Housing Minister, Saviour Kasukuwere, said even if council were to collect 100 percent of billed revenue and received all the loan funds budgeted for, the budget should not exceed $271 million.
“In my letter rejecting your 2016 budget submission, I noted that despite poor performance of the budget for the previous years, Harare continued to budget at a higher level. I have noted that this factor was not taken into consideration in the crafting of the 2017 budget thereby producing a budget that is unrealistic.”
“I therefore have no alternative than to reject your submission on the following grounds. The revenue inflows in the 2016 budget were set at $343 million. Council managed to collect a mere $117 million against a billed amount of $215 million,” he said in a letter to council.
Minister Kasukuwere said despite this poor performance, council submitted an estimated income of $448 million with only $65 million worth of external loans identified as new revenue sources.
He said salary arrears have almost doubled since the approval of the budget and statutory obligations have ballooned to $244 million, which is the equivalent of the actual income of the council for two years.
“No strategies to overcome this untenable scenario have been proffered. The marked increase in debtors indicates that the strategies submitted in the 2016 budget had not yielded results but no new strategies have been proffered.”
“Although the budget indicates that 29,9 percent of the budget will be utilised for employment costs, if the costs are related to the actual income for 2016, the council will utilise 74 percent for salaries, allowances and related costs excluding the massive arrears. This is clearly unacceptable,” he said.
He said he noted that the executive staff salary schedule is in a different format from the other staff implying that a dual system persisted.
The minister said he was concerned that Harare owed water chemical suppliers more than $2 million over 120 days.
“I am aware that Harare is selling water below the cost of producing and no increase in the water tariff is proposed. Council was instructed to reduce the overdraft facility as a condition for 2016 budget approval, this has not been done,” he said.
Minister Kasukuwere commended the council for reducing its creditor levels by 11 percent saying the discipline should be maintained until creditors reached a manageable level.
He said he noted progress made in bringing council up to date in the audit cycle saying it was essential the city be up to date.
“You are required to re-craft a feasible budget with achievable targets and submit them to this office. I wish to remind you that it is unlawful for a council to operate without an approved budget, hence, your submission should reach this office before December 22 to allow for analysis and approval,” he said.
In September, Harare unveiled a $447 million budget for 2017, with the bulk of the funds earmarked for service delivery, while a third was allocated towards salaries.
The budget marked a 30 percent increase from 2016 but the city said it was not going to increase charges for its services.
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