Zimbabwe: Mutare City Revenue Declines, Viability Affected

26 May 2020

Mutare ratepayers, hard pressed by the lockdown restrictions are failing to meet pay their monthly bills, in the process crippling Mutare City Council operations, officials have said.

Mutare City Spokesperson, Spren Mutiwi said the decline in revenue collections and the hyperinflationary environment has spiked the costs of supplying water in the Eastern border city.

Mutiwi said council requires more than $3 million every month for water treatment chemicals, a figure it cannot afford given reduced revenue collection, down by over ninety percent since the beginning of the lockdown.

He said the situation has been exacerbated by the hyperinflationary environment which has eroded the 2020 budget approved by government.

Suppliers to the municipality are demanding foreign currency pegged at black market rates, which are spiraling since the introduction of higher denomination notes by the Reserve Bank of Zimbabwe recently.

"We now require more than 3 million RTGs per month for the monthly water treatment chemicals. The suppliers are also charging in foreign currency and they use black market rates.

"The cost of procuring water treatment chemicals is now very exorbitant and it is mandatory that treatment should be done before conveying the precious liquid to residents and institutions," he said.

Mutiwi said that the municipality would need a bail out soon as the current revenue flow could not cover the costs of supplying the city with clean water.

He added that the city's revenue collection was now down to 10 percent due to the Covid-19 lockdown

"Since the national lockdown, our revenue collection has declined significantly.

"We are now collecting 10 percent of our capacity and we cannot commit beyond our capacity, mindful of the fact that the current collections cannot even cover costs," Mutiwi said.

Successive Auditor General Reports in 2015 and 2018 have already noted that the Council is incurring huge financial loss as a result of undercharging for water consumption, revealing that '67% of the Council's treated water (22 677 156 cubic meters) was not billed as it was lost mainly due to leakages, non-metered connections and accounts not created in the system.'

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