29 May 2018

Zimbabwe: Harare Pursues $755m Debt

Harare City Council, which is now owed in excess of $755 million by ratepayers, has embarked on aggressive debt recovery in development that has seen the local authority issuing 161 000 final letters of demand and 10 000 summons to ratepayers.

As at April 30, ratepayers owed the city $755 811 104.

High-density suburbs accounted for $197 810 339, low-density suburbs $216 057 346, industrial/commercial $317 907 765, Government $10 016 608, Chitungwiza $10 735 941, Norton $3 167 706, Ruwa $99 725 and Epworth $15 670.

The latest effort by City of Harare has been the offer for discount, removal of interest and debt administration charges for full settlement of the balance.

The city says the response from ratepayers has been somewhat lukewarm.

The city's corporate communications manager Mr Michael Chideme said current efforts to revamp the debt collection also include rotation of debtor's officers to reduce familiarisation.

"We will also continue giving 24-hour notices to discuss payments plans. We are also distributing 161 000 final demands to warn ratepayers to pay up their bills or to communicate with our credit controllers," he said.

"We have issued 10 000 summons with the Messenger of Court which are ready for distribution. We have also given the Messenger of Court 3000 warrants of execution which are ready for distribution to be followed up by attachments of property."

He said to avert the above actions, ratepayers were encouraged to settle their bills or enter into discussions of when they can pay.

Mr Chideme said the attachment of property or black listing of ratepayers to both banks and money market was the city's last option saying they encouraged dialogue with ratepayers.

The city's revenue has been declining since it parted ways with its debt collectors WellCash under pressure from residents associations.

The situation has seen council failing to provide basic services and paying salaries.

Last year, Government urged local authorities to use whatever means at their disposal, including debt collectors to recover money owed by ratepayers following revelations that most councils are collecting less than 50 percent of what they bill residents.

A few days before the 2013 elections, Government ordered all 92 rural and urban councils to write-off debts owed by residents since February 2009 to June 2013.

Local authorities have been arguing that the directive by Government for local authorities to write off debts had crippled councils and set a wrong precedence.

Harare wrote off debts amounting to $330 million in line with the Government directive.

Government has however, ruled out another debt cancellation for residents in all local authorities.


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