Editorial Comment: Councils must collect rents they are just letting mount In one recent report from Acting Auditor-General, Mrs Rhea Kujinga, she gave the results of examining a sample of nine local authorities for how they handled the property they own and rent out between January 2016 and December 2021.

The Office of the Auditor- General is now increasing its effectiveness by looking at value for money audits, rather than just checking that the accounts are properly kept and that no one has their hands in the till.

In one recent report from Acting Auditor-General, Mrs Rhea Kujinga, she gave the results of examining a sample of nine local authorities for how they handled the property they own and rent out between January 2016 and December 2021.

Two of the sampled councils do not rent out any property, although, like the rest, they can licence billboards and collect fees.

The other seven were not collecting some of the rents they were owed. Between them they were owed around Z$400 million, and considering the exchange rates on the dates when these rents were not collected that is a lot of money.

Harare dominated the shortfall, around Z$396 million, which will surprise no one, and Chitungwiza would not even supply the schedules of the sums billed and those collected, so its shortfalls were unknown.

Harare’s major problem of lacking a big city accounting system was highlighted once again, as a lot of the required information was simply not available, although, unlike Chitungwiza Municipality, Harare City Council did at least give Mrs Kujinga what information it had, which was not as complete as it should have been. She was able to work out that around 99 percent of what was owed her sample of councils, was owed to Harare.

Local authorities own a range of properties, often housing and flats where the rent collection seemed to be the worse and unusual considering that many of those renting accommodation from a council work for that institution, and so rents should simply be deducted at the payroll stage.

For non-council tenants the methods used by almost everyone else should work, a court order and the eviction.

Harare City Council has easily the largest property portfolio among local authorities, a fair proportion of this being property that was deliberately developed for renting out to supplement the revenue from the ratepayers. 

For example, when the two parkades in the city centre were built, the council dedicated the ground floors to shops, with just the entrance and exit ramps breaking the commercial frontage. 

This was done to get maximum value from the huge investment in building the parkades, using the accumulated revenue from other parking charges over the years, and giving ratepayers the best possible deal.

Another large block of property is owned by Rufaro Marketing, a private company with the council as its sole shareholder. Rufaro was originally a department of the city council and had the monopoly on alcohol sales in the high density suburbs, a development from the original 1890s decision that liquor sales to black people should be controlled.

In later and moderately more open-minded decades, the monopoly was maintained as a way of raising money for community services, with the Rufaro Stadium being probably the largest development funded by beer profits. 

The end of the monopoly after independence saw Rufaro struggling, despite its attempts to offer something a bit better. Without the monopoly, it simply could not compete with private bars and bottle stores.

But that left it with a lot of property, some of which it rented out to bar owners, but a lot was converted to other uses, depending on the needs of potential tenants. At one stage even a large furniture retailer saw the advantage of renting the open beerhall spaces as showrooms. 

Rufaro had other problems, including what some councillors saw as a heavily padded payroll, but could have been in its new guise a source of revenue, rent revenue, for the council. 

Anyone owning commercially-zoned property in a suburb, and in the most frequented part of the suburb at that, can make money with the right development, as other developers have seen around the city. 

One area where the councils and the Government are at one is the provision of proper markets for vendors. Some towns and cities have managed to find a suitable site or sites and charge a lot of people a low daily rent, sometimes as low as the equivalent of US$1 a day.

Harare City Council has admitted in the past that it has lost control of some of its major markets to “space barons”, often operating in cahoots with corrupt officials.

The Commission of Inquiry into Harare will no doubt be looking into this rent collection problem, but now Parliament itself, via its Public Accounts Committee and the portfolio committee that keeps an eye on local Government, can take action. 

This would allow significant pressure on Chitungwiza, which refused to submit needed accounts, as well as pressure on five other councils that had proper accounts but ones written in red ink from the rents not collected, between 39 percent and 86 percent as established by Mrs Kujinga. 

Harare might be the worst but other councils clearly need to be put in order.

There is a belief among sections of the public that councils rent out their property to councillors and staff or to relatives of these favoured groups, and so are reluctant to take action against their own or even themselves. 

Without proper records it is impossible to find out if the tenants were chosen properly.

Billboards now proliferate in urban areas, although the Government is not going to have them lining the national highways. People put up with this advertising in the belief that the local council is making money from them. 

Mrs Kujinga found that all councils were lax in enforcing their rights and many billboards were erected without council knowledge or permission, and that in any case the record keeping was so bad that a council would find it almost impossible to work out who had been licensed.

Private property owners do not let rent debts mount up. They collect, and when the tenant does not pay they evict. It is difficult to understand why a council cannot do the same and impossible to understand how some tenants can be treated as scared cows, not subject to normal commercial procedures, unless there is some fiddling of rules in their selection.

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