Chombo directive wreaks havoc

News
Bulawayo City Council has blamed failure to meet urgent obligations to the Local Government Pension Fund (Lapf) to a directive by minister Ignatius Chombo

THE Bulawayo City Council has blamed failure to meet some of its urgent obligations to the Local Government Pension Fund (Lapf) to a directive by Local Government minister Ignatius Chombo ordering local authorities to write off outstanding debts last year.

Staff Reporter

Chombo issued the directive just before the July 31 elections and this was widely seen as a campaign tactic by Zanu PF.

However, five months after the bills were slashed, local authorities including Bulawayo are still counting the costs.

According to the latest council minutes, Lapf wrote to council last December indicating that a valuation of the scheme’s assets against liabilities showed it had a deficit of $256,4 million.

Councils were then asked to inject money to the fund if it was to remain afloat. Based on the accumulated employer contributions as at December 2011, Bulawayo was asked to pay $66,3 million and $28,5 million respectively.

But the local authority wrote to Lapf indicating it was unable to pay its share and cited Chombo’s directive as one of the reasons for its precarious financial situation.

“Kindly be informed that council is not in a position to pay the $94 900 023,38 ($66 368 304,32 global deficit and $28 531 719,06 minimum solvency) being our share of the apportioned amount,” council’s correspondence with Lapf reads in part.

“This is due to the severe financial stress being experienced by council occasioned by the following — reduced cash inflows because we are on a water-shedding regime as a result of minimal water inflows into our dams for the past three years, the macroeconomic environment is such that there is very little disposable income, thereby affecting consumers’ ability to pay their bills, the recent directive from the Local Government and Urban Development minister directing local authorities to write off some debts as at June 30 2013, has further hindered our ability to make a contribution towards the above noble cause.”

Council also revealed in the same report that it failed to pay its workers bonuses last December because of the cash squeeze.

Ironically, the government has not been paying its debts to council despite forcing the local authority to forgo revenue from residents with outstanding bills.