Council reels under debt

bulawayo city council

BULAWAYO City Council is in financial doldrums due to a growing list of creditors, while debtors are not paying their dues, particularly domestic consumers and the government, Parliament heard yesterday.

Own Correspondent

Acting town clerk Sikhangele Zhou told the Parliamentary Portfolio Committee on Local Government, Public Works and National housing that the country’s second-largest city was sitting on $99 million debt to various State institutions and organisations, while it is owed more than $100 million by the government, industry and individuals.

The financial situation at the local authority, according to Zhou, has resulted in council failing to pay workers in time and owes them over $3 million.

In her presentation to the committee chaired by Zanu PF MP Irene Zindi, Zhou said council had engaged various creditors for a payment plan, especially those linked to the State, as their cash inflow was dire.

“We have employed strategies with Zimra (Zimbabwe Revenue Authority), where debts owed by the government institutions are offset against council’s obligations,” she said.

“Council has engaged Zesa with a view of offsetting the debt owed by Zimbabwe Power Company against what council owed Zimbabwe Electricity Transmission and Distribution Company.”

The situation, Zhou said, is worsened by their commercial entity, Ingwebu Breweries, not remitting anything to council in dividends to alleviate the problem.

“Ingwebu has been facing viability challenges and has not paid any dividend to the city of Bulawayo since 2004,” she said.

“Since dollarisation, they have not paid any dividend for certain.

“They started off on a loss-making note and last year they made a small profit, which they used to capitalise, hence they did not pay any dividend.”

The local authority, according to a schedule tabled before the committee, is owed $1,9 million by the government, industry and commence owe them $42 million and domestic consumers owe more than $52 million.

The schedule further reveals that Bulawayo owes NSSA more than $500 000, Zimra over $1 million and $3 million for salaries among other creditors.

Zhou said her council was battling to give citizens better services due to lack of financial resources.

Turning to housing development in, Zhou said the local authority had engaged private developers to assist, but they had disappointed with a case in point being the contractor given the task to develop Selborne Brook taking years to complete the project.