THE BULAWAYO City Council is owed over $50 million by local companies as of August this year.
Both businesses and the local authority battle a severe financial squeeze blamed on the prevailing harsh economic environment. But the council, which is struggling to pay its workers on time, has found itself in a quandary following the government’s arbitrary decision to force all local authorities to write off debts (which accrued between 2009 and June this year) owed by residents in what critics view as a populist strategy.
It has since emerged that while council is battling its financial woes, it is in fact, owed over $50 million by local firms who are equally struggling to survive.
According to the city council’s 2013 budget review statement, companies in Bulawayo owe the local authority $50,01 million.
According to the budget review statement, residents as of July this year, has accrued a debt of $10 million in unpaid bills adding to the $50, 01 million already owed by business.
The local authority is now struggling to finance its debt and has accumulated interest of more than $10 million in the period from June to September to $78 million.
Industry in Bulawayo is in dire stress after nearly 100 companies closed last year, throwing into the streets thousands of workers.
According to economic analyst Eric Bloch, Bulawayo needs an estimated $400 million to fully recapitalise in the short to medium term.
Last week the Confederation of Zimbabwe Industries congress resolved that it would approach the government with a proposal to consider declaring Bulawayo a special economic zone.
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