Zimbabwe

Zimbabwe councils that wrote off $2bn in debt need help

18 November 2018 - 00:00 By KENNETH MATIMAIRE

Zimbabwe's local authorities are to approach the national government for compensation from losses incurred five years ago when they were forced to write off $2bn in debt owed by residents.
In 2013, the city of Harare wrote off $330m in debts.
Despite the debt cancellation, Harare city council spokesperson Michael Chideme said the debt owed by ratepayers had risen from zero to $710m at the end of last year, and that it now stood at $800m.
The debt write-off was from February 2009 to June 2013 and took place just weeks before elections. The directive was issued by former local government minister Ignatius Chombo.
It was seen as political point-scoring by Robert Mugabe, who was canvassing for urban votes. Ever since, 32 urban and 60 rural councils have struggled to recover.
This week urban council officials said the debt cancellation had benefited residents but not the councils.
"When government issued the debt write-off, it only applied to debts that we were owed by ratepayers, residents, companies and government institutions. But they did not extend the write-off to our own creditors because we had institutions we owed and the money was supposed to come from the debts ratepayers owed us. So this created a big dent on our financial books," said Chideme.
"Government should give us back that money."
Zimbabwe's second-largest city, Bulawayo, is owed $200m, Gweru $62m, Mutare $53m and Masvingo nearly $50m.
Kariba town council finance director Saratiere Chitenhe has recommended that the government come up with "a modality to compensate councils for the 2013 debt write-off".
The Association of Rural District Councils of Zimbabwe also said the government should compensate the councils.
Local government minister July Moyo said local authorities had not yet presented their appeal to his ministry.
"The way forward is to find solutions together, government and councils, and one of the issues that we have gathered on has to do with fiscal capacitation and revenue collection systems," he said.
"We also learnt that most councils do not have the financial capacity to attend to service delivery, be it a burst sewer and water pipes. So we have to look at central government to avail funds, but then government is facing its own fair share of fiscal constraints. So the other option is to look at lending partners such as the African Development Bank and others. If this doesn't yield results, government has to look for other sources."
Poor service delivery has been at the core of complaints by residents in most urban areas.
The cholera outbreak that hit Harare in September has been blamed on poor service delivery, burst sewers, an inadequate supply of tap water and unprotected boreholes...

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