Chronicle Editor
THE Masvingo City Council is in arrears of $4 billion with its creditors such as the Local Authority Pensions Fund (LAPF), with the city attributing the increase to liquidity challenges.
According to the minutes of the Finance and General Purposes Committee, the local authority is in arrears of $4 billion with Zimra (Paye and Aids Levy) topping the list with $2,4 billion followed by LAPF with $1 billion. The city fathers owe the National Social Security Authority (Nssa), Zimdef, Standards Levy $295 million, $107 million, and $70 million respectively.
“The Committee considered the report of the Finance Director on the creditors balances as at September 30, 2023. It was reported that Council payables continued to increase owing to liquidity challenges and economic hardships experienced in the economy. Council has agreed payment plans with major creditors such as LAPF, Zimra, Zesa and Zimdef,” reads part of the Finance minutes.
“It was reported that a daily stop order arrangement with the Local Authorities’ Pension Fund (LAPF) was agreed to discharge of the debt. During the month of September $40,7 million was deducted through the stop order facility.
“A payment plan was agreed to pay the amount owing to Zimra, and the payment plan needs to be observed to avoid garnish orders, this payment plan requires Council to clear off the outstanding debt amounting US$20 000 and $ 307 million.”
Meanwhile, the local authority was able to pay its September net salaries despite cash flow challenges and adverse effects of inflationary pressures.
“With regards to salaries, it was reported that the gross salary bill for July 2023 was $2 319 918 266,92 for permanent employees and $434 278 325,68 for contract employees which amounted to $2 754 196 592,60. For August 2023, the total gross salary bill was $2 194 040 457.51 and the increase in the gross wage bill was partly attributed to exchange rate movements since employee salaries are exchange rate indexed.”
“The net salaries for the months of August and September 2023 were $1 207 008 272,10 and $1 317 972 159,48 respectively. Net salaries paid in US$ amounted to US$ 121 266 in August 2023 and US$118 637 for September 2023. It was noted that all staff net salaries for the period ending 30 September 2023 were paid in full.”
Failure by Masvingo to remit pension funds results in workers going to retirement being frustrated and at times going home empty-handed after years of service.
“Local authorities constitute the bulk of institutions that are not remitting to pension funds contributions they would have deducted from employees according to a 2022 list published by the Insurance and Pensions Commission (Ipec). — (source: New Ziana)
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