Harare acts on municipal bonds

HARARE - Harare City Council has held off on issuance of municipal bonds until the economic environment stabilises.

According to finance committee chairperson Luckson Mukunguma, the bonds were meant to assist in helping the city finance some of its projects.

Harare has been on a drive to improve its services by taking loans and grants to purchase vehicles and equipment to improve on their service delivery mandate.

“The anticipated proceeds of loan funding from the issuance of municipal bonds has not yet materialised. This is largely due to the unfavourable macro-economic environment. According to advice from professional brokers, if the municipal bonds are issued now this might lead to losses due to the unfavourable economic environment which is compounded by the limited affordable capital and line credit on the money market,” he said.

The chairperson added that council had to manage with borrowed funds from local financial institutions.

Mukunguma said the nation was facing serious economic challenges which included liquidity crisis, shortage of foreign currency, high operating costs, a four tier pricing system, shortage of essential goods and emerging inflationary pressures-which council however was not spared.

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