27 November 2012

Zimbabwe: Three Months No Pay As Council Debts Outstrip Revenue

MDC-T-run Chitungwiza Municipality has virtually collapsed with debts, running into millions of dollars, outstripping revenue. This has triggered a strike by workers who have now gone for three months without getting their salaries.

Documents in our possession show the sorry state of affairs at the once-vibrant council.

The municipality's monthly wage bill stands at US$1,7 million, against US$1,4 million revenue.

This translates to a deficit of US$300 000 every month.

"The income and expenditure reveal that the organisation is accumulating a deficit every month and at this rate, banks are hesitant to continue offering exposures to the municipality. This, therefore means that we have to consume what we have collected," read minutes of a meeting held last week.

Council has several obligations, as a result of loans taken from banks during the era of the resuscitation team.

Every month, the National Social Security Authority needs US$200 000, Zimra US$100 000, Premier Services Medical Aid Society US$100 000, FBC Bank US$140 000 and Kingdom Bank US$100 000.

As at November 2012, Chitungwiza owed Metropolitan Bank US$2 750 000, FBC Bank US$1 524 161.87 and Kingdom US$773 341.06.

"The three (bank) exposures are attracting interest to the tune of around US$200 000 per month. Although payments are being made on a daily basis to Kingdom and FBC banks to cater for these exposures, the amounts committed for the reduction of the exposures have not made a significant impact with the substantial amount going towards bank interest," read the minutes.

Management is now living in fear of debt collectors.

"During the months of October and November 2012 only, we had threats of property attachments from Muskwe and Associates and PSMAS. For Muskwe and Associates a total of US$73 000 was paid and for PSMAS, the amount needed was US$400 000 and from the 16th of November up to the 20th of November we have paid US$161 000 towards PSMAS," read the minutes.

Management said it created a separate account for salaries with effect from last month.

"At least 50 percent of our daily collections have been deposited into a separate account so as to have a reserve for salaries and wages. Enough funds have been saved to pay for grade one to four for September 2012.

"However, due to payments to PSMAS only salaries for grade one to three have been paid and as of today, the balance in that reserve account is US$6 542.86. The total net for grade four is US$296 361.10."

Yesterday, the workers gathered at the council head office, saying they would not resume work until management made a commitment to offset the salary arrears.

"The problems at Chitungwiza Municipality are not just monetary ones, but we have a management that has a wrong attitude to our grievances," said Zimbabwe Urban and Rural Council Workers Union secretary-general Mr Bernard Dhanda.

Chitungwiza chamber secretary Ms Last Madzivanyika yesterday referred all questions to town clerk Mr George Makunde.

Mr Makunde was unavailable for comment as he had reportedly gone to the Ministry of Labour and Social Services for conciliation with the striking workers.

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