Residents’ debt to city balloons to over $150 billion

Talent Gore

HARARE City Council was owed $149.36 billion as at May 31 and has declared that it is unable to fund its obligations due to the depreciating local currency.

Council acting finance director, Godfrey Kusangaya, said they will request permission from the Government to bill specific charges in foreign currency to address the problem.

To boost revenue collection, the council will also reintroduce blitz strategies, institute cost-cutting measures, and limit procurement to critical needs. Kusangaya added that the suppliers of water chemicals will be required to access foreign currency from banks, which translates into increased costs of procuring chemicals.

“We will review the council’s obligations for Mbare hostels electricity charges, limiting procurement to critical needs, instituting cost-cutting measures and re-introducing blitz strategies on non-billed specific areas to boost revenue collection,” he said.

“There is also the issue of Mbare hostels where the council was not getting any revenue from the hostels.

“The estimated bill is over $1.5 billion per month plus interest thereon the following month.

“The City is predominantly funded by inflows from billed income and the city’s debtors book was sitting at $149.36 billion as at 31 May, which had been devalued by more than 100 percent from US$57.957 million to US$29.365 million in a space of nine days,” he said.

Kasangaya said under the new arrangement, the council could only access foreign currency through commercial banks, who were allowed to charge above the foreign exchange official rate.

He revealed that water treatment chemical requirements for the council averaged US$2.1 million per month, which translated to $11.6 billion, which was almost 50 percent of inflows using the May figures.