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Innocent Ruwende Municipal Reporter
Harare City Council is set to borrow US$15 million from CABS to finance retirees’ pension payouts after the city embarked on a cost-cutting exercise.
The city retired over 1 000 ordinary workers who had reached the age of 60.
Ten middle managers and directors whose departments were collapsed were also sacked as remuneration was consuming more than half of Harare’s revenue.
Council collapsed several departments, which include housing and community services and the Chamber Secretary’s office, which formed corporate services; while engineering services, waste management and urban planning now fall under the department of works.

This left some directors jobless.
The new structure comprises the departments of Corporate Services, Finance, Health, Department of Human Resources and Public Safety and Works.
According to minutes of the Finance and Development Committee of August 26, acting finance director Mr Tendai Kwenda reported that the loan had been facilitated in terms of Section 291 of the Urban Councils Act.

“City of Harare had embarked on a cost-cutting and rationalisation exercise hence the funding would assist to pay lump sum of the outstanding benefits claims and monthly pension arrears in respect of the City of Harare and Harare Water,” read part of the minutes.

The committee resolved to approve the loan facility for the purposes of financing pension payouts due to the retirees.
It also noted that upon approval of the recommendation, council’s total facilities with CABS will stand at us$22,1 million.

Council approved the business loan on condition that it would attract an annual interest of 14 percent, which is subject to review, payment of two percent fee upon acceptance of the facility, annual review and establishment fee of two percent of the outstanding balance and payment of legal costs in the perfection of the security by council.

Council also approved the use of Samora Machel Parkade title deeds as security for the loan.
Mr Kwenda also reported that the prevailing economic challenges had affected most Harare residents and corresponding revenue.

He said the aggregated income and expenditure for the period January to June 24 was slightly above $48,7 million and a summary of debtors stood at $268 million and creditors $211, 6 million.

He said the revenue collection rate was 56 percent while expenditure stood at 54 percent.
The committee noted with concern the decline in revenue collection rate and it was of the view that a special meeting be convened as a matter of urgency.