News / National
Chinamasa won't order another councils debt write-off
08 Aug 2017 at 03:23hrs | Views
FINANCE minister Patrick Chinamasa yesterday said government had learnt from its past mistakes and would not order another debt write-off on local authorities as the majority were failing to recover from a similar directive issued in the run-up to the 2013 harmonised elections.
Chinamasa told delegates at the ongoing Urban Councils Association of Zimbabwe's business conference in Harare that the 2013 debt waiver caused financial loss of more than $500 million to local authorities, which some councils have not recovered from.
"The Ministry of Local Government has already submitted to us as Treasury a list of local authorities that incurred losses due to the cancellation of the outstanding bills. Let me say that that will never happen again," Chinamasa said.
"Can you believe it that the amount of losses that we incurred through that cancellation is half a billion, so where are we going to get that money? It puts a big hole into your finances, so that we acknowledge. The matter is currently under consideration and we remain very positive that we will find practical ways to assist the affected local authorities."
Chinamasa said the debt cancellation had affected investment in municipalities.
"Most of our local authorities are insolvent, that should be corrected, no investor or country can solve it. When you move around the cities, you observe massive housing development, but there is no corresponding industrial development. What that means is that we are heading for some social problems in the future."
Chinamasa rapped top officials who awarded themselves hefty salaries at a time their councils were struggling to stay afloat.
"You must appoint appropriate people and qualified people to run your finances. Thirty percent of revenue should go towards employment and 70% towards service delivery and if it is the other way round, you will never get things right.
Vice-President Phelekezela Mphoko opened the conference urging the private sector to partner councils in promoting infrastructure development.
Chinamasa told delegates at the ongoing Urban Councils Association of Zimbabwe's business conference in Harare that the 2013 debt waiver caused financial loss of more than $500 million to local authorities, which some councils have not recovered from.
"The Ministry of Local Government has already submitted to us as Treasury a list of local authorities that incurred losses due to the cancellation of the outstanding bills. Let me say that that will never happen again," Chinamasa said.
"Can you believe it that the amount of losses that we incurred through that cancellation is half a billion, so where are we going to get that money? It puts a big hole into your finances, so that we acknowledge. The matter is currently under consideration and we remain very positive that we will find practical ways to assist the affected local authorities."
Chinamasa said the debt cancellation had affected investment in municipalities.
"Most of our local authorities are insolvent, that should be corrected, no investor or country can solve it. When you move around the cities, you observe massive housing development, but there is no corresponding industrial development. What that means is that we are heading for some social problems in the future."
Chinamasa rapped top officials who awarded themselves hefty salaries at a time their councils were struggling to stay afloat.
"You must appoint appropriate people and qualified people to run your finances. Thirty percent of revenue should go towards employment and 70% towards service delivery and if it is the other way round, you will never get things right.
Vice-President Phelekezela Mphoko opened the conference urging the private sector to partner councils in promoting infrastructure development.
Source - newsday
