Chronicle Editor
Patrick Chitumba, Midlands Bureau Chief
DEFAULTING Gweru residents will now fork out five percent interest to council on overdue bills while those who pay on time may soon get discounts.
Gweru City Council (GCC) is failing to fulfill its service delivery obligations because its coffers are running dry as debtors, who include residents and businesses collectively owe it $1,6 billion.
Only in February the residents and businesses owed council $1,4billion.
As of December 31, 2021, the debt stood at $1,1billion.
In an interview, acting town clerk Mr Vakayi Douglas Chikwekwe said a full council meeting on Monday evening passed a resolution to impose five percent interest on defaulting ratepayers.
All the 18 Gweru councillors unanimously voted for the imposition of the interest rate which is aimed at forcing ratepayers to pay their debts so that the city remains able to meet the service delivery requirements.
Mr Chikwekwe said the local authority would penalise defaulters while rewarding paid-up ratepayers.
“A full council which has councillors from 18 wards passed a resolution to introduce five percent interest per annum on all debtors.
Yes, this is the prescribed interest rate on debts on arrears. It cushions council a bit in this hyperinflation environment.
The local authority would penalise defaulters while rewarding paid-up ratepayers,” said Mr Chikwekwe.
He said the customers’ debt has been skyrocketing as residents and businesses are not paying their service charges such as rates, rentals and water services.
“As we speak, customers owe the local authority $1,6billion. The debt has skyrocketed from $1,4billion to $1,6 billion in two months.
Because of this, it means that service delivery is being hampered by the non-availability of funds since residents and customers are not paying up.
So if we add or factor in the five percent interest, it means that when the customer finally pays, we will be cushioned by the interest. It will improve our revenue collection,” said Mr Chikwekwe.
He said only defaulting clients from three months going up will be affected by the 5 percent interest rate.
“Customers who are paying are not affected and we are looking at discounts to thank them for being loyal to the council,” said Mr Chikwekwe.
He said the council now owes creditors $355million with the bulk being Zesa which is owed more than $240million.
“If we get the $1,6 billion from our customers, we will easily pay off our creditors the $355million.
We face power cuts from Zesa as they force us to settle electricity bills time and again and that also affects water availability to the customers especially the residents. So we are hopeful that the five percent interest rate will go a long way in cushioning council coffers,” said Mr Chikwekwe.
GCC is also in the process of implementing stringent debt recovery measures such as demand letters, summons, attaching property, writs of execution of property and disconnections to force debtors to settle their debts on time.
The Parliamentary Portfolio Committee on Public Accounts last week said local authorities should be allowed to charge companies involved in exporting or selling products in foreign currency, in forex.
Chairperson of the committee Mr Brian Dube said that would help local authorities improve service delivery.
Rate payers, especially in urban areas, have to cope with persistent water shortages, uncollected litter, pothole infested roads and sanitation problems as municipalities struggle to provide basic services mainly due to unavailability of foreign currency.
Fuel, spare parts and other consumables needed by local authorities to improve service delivery are sold in foreign currency especially the United States dollars yet local authorities are charging rates and services in local currency.
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