BULAWAYO — City Council, currently owed in excess of US$100 million by residents, companies and government is now in a precarious financial position as it battles to service a debt of US$99 million, a development that has forced the local authority to be tough on its debtors.
The local authority, also waiting for government approval of its US$158 million budget for 2015, says it is finding it difficult to deliver basic services with its debtors increasing almost every month owing to the prevailing economic challenges in the country.
Bulawayo City Council (BCC)’s biggest debtor are the residents owing in excess of US$56 million followed by industry and commerce standing at US$42 million and government at US$1,9 million.
“For the domestic debt, you will appreciate that in 2013 there was a directive that as council we should write-off our debtors for the consumers,” said BCC accounting manager, Cyprian Dabengwa.
“As you can see now that debt has risen to US$56 million as at the end of February which means we are not having a lot of payments in terms of our domestic ratepayers.”
In July 2013 the government issued a directive ordering municipalities to cancel all debts owed by residents backdating to February 2009, throwing local authorities into financial turmoil that they are still battling with to date.
Dabengwa said BCC remained tied in as far as service delivery was concerned.
“Our roads are in a bad state; in terms of water we have got a lot of debts and all that needs money and as a local authority we are facing challenges in terms of providing services or improving services,” bemoaned Dabengwa.
For the past two months, council has been missing its revenue collection targets, owing to non-payment by beneficiaries of its services.
In January, council collected only US$4,8 million, accounting for 79 percent of US$6 million which had been billed while in February the municipality missed its target by 31 percent.
“So in a nutshell we are facing challenges that our debtors continue to increase,” emphasized Dabengwa.
He said as a result they were also having a mammoth task in clearing their debt which has soared from US$24 million in 2010 to the current US$99 million.
“You will appreciate that when we wrote-off our debtors for water that water would have been pumped using services of ZESA and people supplying us with chemicals but unfortunately those creditors remained with us,” said Dabengwa.
“At the moment we are having the challenge that whilst we are owed US$100 million by our ratepayers, our creditors are owed US$99 million by your local authority.”
He said because of the circumstances they were finding themselves in they were forced to hand over their debtors to debt collectors once all channels to recover their monies had been exhausted.
“It is not something that we enjoy doing but for us to continue providing services we are forced to do debt collection procedures,” Dabengwa.
BBC has since extended a tax amnesty on struggling corporate ratepayers in a bid to salvage the little payment they can get as the economy continues to nosedive.
The amnesty in which BCC gives 50 percent discount to all companies that clear their accounts backdating to December 31, 2013, had expired last year and has been extended to June 30.
BCC has since the announcement of the facility given a discount of US$2,3 million to industry and commerce.
“We are encouraging our industry and commerce to come and utilise that,” said Dabengwa.
Bulawayo is not the only city experiencing challenges. Harare has since been forced to disconnect thousands of residents who have not been paying for their water.
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