VINCENT MHENE IN GWERU
Gweru City Council is battling to recover about ZWL$760m in unpaid bills by residents, commercial and government entities, it has emerged.
The debt has ballooned 157% in the five months to May this year from about ZWL$296.3m reported at the beginning of January 2021.
Gweru Mayor Josiah Makombe attributed the ballooning debtors’ figure to reluctance by ratepayers to honour their obligations.
“The budget has been underperforming due to low appetite by residents and other stakeholders to pay their bills.
“Of great concern is the ballooning of the debtors` book figure which as of May 31, 2021 stood at ZWL$759 657 662. What is more worrying is that our debtors have increased by ZWL$463 356 896 from the figure that was outstanding as of December 31, 2020,” Makombe said during a state of the city address on 98.4FM Midlands, a sister radio station of Business Times.
He said due to non-payment of bills by ratepayers, the city council was now struggling to clear its debt to service providers, particularly its three major creditors, Zimbabwe Revenue Authority (Zimra), Zimbabwe Electricity Transmission Distribution Company (ZETDC) and the Local Authorities Pension Fund (LAPF).
“As at May 31, 2021, the Council owed a total of ZWL$210 941 113 to these three (Zimra, ZETDC and LAPF) creditors out of a total creditor figure of ZWL$222,728,811.
“Residents might be interested to know that on the 17th of May 2021, ZETDC switched us off at our water treatment plants over a debt of ZWL$143 249 129 and only restored supplies after we had committed ourselves to a monthly payment plan of ZWL$13m,” Makombe said.
In June, Makombe said Zimra garnished the council`s accounts over a ZWL$44m debt and the local authority paid ZWL$14 253 097.86 for the tax collector to lift the garnish.
He said while the local authority has seen revenue collection increasing in the first half of 2021, monthly collection remained low, with a total of ZWL$464 889 026.53 collected during the period.
Makombe said: “At current revenue collection levels Council is struggling to pay the monthly bill for electricity of $13m, yet this is the same electricity we need to pump water to the residents. I once more appeal to the residents and other stakeholders to pay their bills if we are to continue supplying water.”
Turning to the budget performance, the mayor said the lack of “appetite by residents and other stakeholders to pay their bills” meant the budget was underperforming.
“We have been billing on average ZWL$143m per month since January 2021 and this translates to a cumulative figure of ZWL$858m for the six months to June 2021.
“If we were to use collections over billing as a measure of budget performance, it would be 54.08% as our collections for the same period was ZWL$464m,” Makombe said.
He added that the situation meant that the city council had “lost 45.92% revenue amounting to ZWL$394m”.
Early this year, Gweru City Council embarked on a number of debt recovery measures including litigations against defaulting ratepayers, which saw some residents having their property attached.
The local authority also suspended the levying of interest on arrears with effect from June 2021 billing to encourage residents to clear their debt.
The council was from February 2021 charging interest on debtors at the rate of 1.58% per month as a punitive measure for defaulters.
