2 May 2014

Zimbabwe: City's Debt Soars

Harare municipality's debt to the Local Authorities Pension Fund has risen to US$48 million with the city's pensioners having now gone for months without getting any benefits.

As of March 31 this year, the City of Harare owed LAPF US$38,11 million while Harare Water owed US$9,63 million. Harare Municipality Workers' Union chairman Mr Cosmas Bungu, said LAPF had thus stopped paying Harare City Council pensioners.

"To make matters worse, they are retrenching more workers who have not been paid for quite some time.

"How do they expect them to survive when they have no money and when LAPF does not have money to pay them?"

The city council has also accumulated statutory obligations debts with the Zimbabwe Revenue Authority, the National Social Security Authority, ZimDef (training levies) and the Harare Municipal Medical Aid Society.

Harare's corporate communications manager Mr Leslie Gwindi said they had made payment plans to cover the debts.

The city bills on average reach US$22 million per month and collects around US$11 million, US$5,2 million of which goes to employment costs excluding statutory obligations.

It retains 55 percent of collections, with the remainder going to Harare Water where funds are ring-fenced for continuous investment in water.

To provide basic service, council says it needs US$15 million monthly.

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