City seeks to borrow $180m

City seeks to borrow $180m

Innocent Ruwende Municipal Reporter
FINANCIALLY hamstrung Harare City Council is seeking permission to borrow $178 million — more than half its 2016 budget — to finance service delivery initiatives after its revenue collection strategies failed to improve its financial standing.

According to the $343 million budget unveiled by the city recently, the bulk of the money was expected to be raised from increased water sales which were proposed to rake in $139,6 million, property tax for domestic, industrial and commercial properties $118,1 million, while refuse collection was expected to chip in with $26,8 million.

Finance and revenue collection was expected to contribute $4,3 million, the Zimbabwe National Roads Administration and billboards $4 million, administration and city architect $7,6 million, clamping and towing $5,6 million, health fees $7,4 million, and rentals, leases and markets $15,1 million.

Estates were expected to contribute $8,6 million, public safety $4,6 million, while other sources would contribute under $1 million.

Salaries and allowances would pick up 29,8 percent ($114,3 million), while service delivery expenditure would account for the remaining 70,1 percent.

The city’s corporate communications division said the city was financially hamstrung and in the short term decided to hire vehicles to collect revenue.

“Council needs to re-equip its vehicle fleet to avert shortages. However, we are financially hamstrung. In the short term, we decided to hire vehicles to collect revenue. Council has long-term plans to buy new vehicles on lease finance. To access lease finance, council has to seek borrowing powers. Council has already published its request to be granted borrowing powers and is now awaiting Government approval of the 2016 budget, a major prerequisite to get the powers,” said council.

According to recent minutes of the Finance and Development Committee, councillors questioned the outgoing finance director, Mr Justin Mandizha, on the city’s capacity to borrow such a large amount and he advised that preliminary analysis was underway.

Mr Mandizha came under fire from councillors and other stakeholders who accused him of failing to steer the city out of debt and contributing to the decline of service delivery through bureaucratic policies and his decision to borrow is likely to worsen the situation.

He was also accused of cancelling a $40 000 vehicle tender, in favour of hiring vehicles to the tune of $100 000.


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