MUTARE- Council is seeking authority to borrow $158 million towards capital projects, despite a ballooning debt amounting to $ 500 million as ratepayers continue to default in settlement of bills, it has emerged.
In a notice the City stated that it resolved ‘in its Special Council Meeting held on the 27th of January 2021 to apply for borrowing powers to fund capital projects valued at ZWL$158,155,00.00 (One hundred and fifty eight million, one Hundred and Fifty Five thousand dollars).
Since the new administration was incepted in April 2017 it claims to have cleared these arrears.
‘Notice is therefore given in terms of section 290 of the Urban Councils Act [Chapter 29:15] that council intends to borrow the funds from financial institutions for fund capital projects…’ read part of the notice.
Presenting on the state of affairs at the municipality to recently appointed Minister of State Nokhutula Matsikenyeri council management said despite paying off a legacy debt, its debt is steadily rising.
Acting Town Clerk, Dr Antony Mutara said the city has now started accruing debt due to depressed revenue collection and viability challenges owing to the impact of Covid19 pandemic.
“The city has been facing a myriad of challenges financially and the local authority was operating a creditors’ book of $22 million with $10.5 million being in salary arrears for employees dating back from 2013.
“Owing to reduced revenue inflow which is below10% because of Covid-19, we are now faced with a ballooning of debt currently above $500 million and as a result capital projects have suffered.
“The City of Mutare has faced many complex challenges in its history but the wheels of service delivery are now back on the rails despite the prevailing economic challenges,” said Dr Mutara.
Mutare mayor Blessing Tandi while acknowledging the harsh macroeconomic conditions under the Covid-19 pandemic, said failure to settle the debts and bills will further stifle service delivery within the city.
“Non-payment of rates is affecting us a negatively as a city collecting, because it is way below our average so much that we are failing to meet some of our targets,” said Tandi.
Council management said progress on investment projects like the Sakubva Urban Renewal has stalled, as it re-prioritized funding towards prevention, mitigation and public health promotion.
Mayor councilor Blessing Tandi is on record that the huge debt is hampering service delivery by the local authority for roads, sewer and water needs among other essential services.
“The debt shows that we are not recovering the cost of service as we should, which greatly affects our performance. This means we would have offered a service for free as we are failing to recover the cost attached to the service we provided.
“We are operating from hand to mouth. We need to procure utility vehicles but because there is no revenue coming in we end up compromising on service delivery,” said Tandi as he pleaded with ratepayers to settle their bills.
Council has also faced a backlash for hiking its rates force the local authority to further revise rates downwards following an “unsatisfactory” marginal review of the budget as ratepayers for considerate increments after proper consultations.
The Municipality succumbed to pressure from residents that joined a campaign launched by Conscious Development and Empowerment Trust (CODET) against hikes under economic challenges and Covid-19 pandemic.