Harare council owes statutory bodies $200m

HARARE - Harare City Council (HCC) is failing to remit funds to statutory bodies, with the amount due ballooning to over $200 million, its acting finance director Tendai Kwenda said.

In a report presented to HCC’s joint human resources and finance committees, Kwenda said payment plans had been arranged with the owed.

institutions — tax collector Zimbabwe Revenue Authority (Zimra), pensions administrator National Social Security Authority (Nssa) and the Zimbabwe Development Fund — but service delivery had been hugely compromised.

Other bodies owed are the Local Authorities Pension Fund (LAPF), Harare Municipal Medical Aid Society (HMMAS), Employment Council and three workers’ unions that represent HCC’s employees.

According to the report, the city owes $24,2 million in salary arrears which include November 2015 bonuses and an additional $294 579 for Zimbabwe National Roads Administration contract employees.

“The position regarding council payroll creditors as at June 30, 2016 is as follows; Zimra $163,7 million, LAPF $43 million, HMMAS $1,4 million and Nssa $1 million, with the total amounting to $209,1 million,” Kwenda said in the report.

“Suppliers owed are Zesa; $113,4 million, trade creditors; $7,4 million, water chemicals; $5,3 million, dam levies; $1 million and plant rehabilitation; $600 000,” he said, adding that “the total for supply creditors is $128,7 million”.

Kwenda said the reasons why the local authority failed to meet its obligations was because of a high unemployment rate, meaning less disposable income, rampant company closures, persistent cash shortages and poor performance of revenue streams.

“Tight liquidity conditions, disillusionment by compliant ratepayers following the infamous directive to write-off domestic debts accumulated up to June 2013, revenue leakages, general unwillingness to pay and anticipated debt forgiveness in 2018 are some of the reasons why council is in a financial fix,” he said.

In the report, Kwenda stated that council’s major monthly expenses were salaries and allowances that amount to $5,7 million, water chemicals costing $2,5 million, electricity at $1,2 million and fuel at $700 000.

Among strategies to maximise revenue collection, the HCC is encouraging debt swaps, disconnection of water for debtors and a full roll-out of prepaid water meters.

Also to be implemented are inspections to curb illegal activities, automation of certain activities like street sweepers and grave diggers to reduce labour costs.

“Salaries have to be right-sized and linked to productivity. There is also need to strengthen systems and controls at all markets, home industries and termini to curb revenue leakages.”

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