6 September 2017

Zimbabwe: City Rates Arrears Balloon to $700 Million

Innocent Ruwende Municipal Reporter-- RESIDENTS now owe Harare City Council (HCC) more than $700 million, and there are fears arrears will continue piling up on false expectations that Government will write off debts before the 2018 elections.The city's finance director, Mr Tendai Kwenda, said in an interview some politicians were making the situation increasingly difficult by encouraging residents to boycott paying rates.

"The politicians are not helping the situation. Inasmuch as the Minister (Saviour Kasukuwere) has been on record as saying there is not going to be a debt write-off, those that owe councils and municipalities should go and negotiate payment plans. That is not happening with other politicians," he said.

"They are actually going out telling people not to pay. I am not sure towards the elections Government will give that directive to write off the debts once again. I do not think that is going to happen because if that happens it will obviously cripple local author- ities."

He said while HCC lost $335 million in revenue in 2013 when Government ordered local authorities to write off debts, statutory obligations to the National Social Security Authority (NSSA), the Zimbabwe Revenue Authority (Zimra) and the Local Authorities Pension Fund continued to accrue.

The city, he said, has been saddled by debt since then.

"The debts are really not going down. We are owed almost $700 million as at end of July. We have re-engaged Wellcash Debt Collectors; they started work end of August. The re-engagement will not obviously bring immediate results given that their operations had been disturbed," he said.

"What it means is that they have to also start re-issuing those final demands. They have to start agreeing on payment plans, which had been suspended following the termination of the contract. We can only feel it (the full impact of the re-engagement) in three or four months."

HCC believes that had its contract with Wellcash not been prematurely cancelled, it would have been able to forestall the rising debt.

Mr Kwenda said: "Initially (when Wellcash was engaged) it was about $500 000 a month additional income. It went up to about $600 000 to $700 000, and by the time we disengaged, they had collected between $2,5 million to $3 million. If people do not want Wellcash at their doorstep, they should go to any council revenue collection point or district office and propose a payment plan."

"We will accept something obviously reasonable. Ideally, we would want people to pay at least half of what they owe. High-density areas' bills do not exceed $30 in terms of rates and supplementary charges, so if your bill is about $1 000 in arrears, it means you have not paid for almost two years."

Zimbabwe

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