Bulawayo council to hike rates by up to 42%

COUNCIL is mulling raising service charges for water, refuse collection and leases by up to 42 percent to help balance its books.

This flies in the face of the MDC-run municipality's pledge to protect ratepayers against arbitrary increases, in line with the opposition party's 2018 election manifesto.

The Daily News can report that the issue is high on the agenda of the next full council meeting set for next Wednesday.

If the proposal sails through, ratepayers would have to brace for substantial rates increases.

Mayor Solomon Mguni referred questions to Finance committee chair, Silas Chigora, who confirmed the development although he could not be drawn into shedding more light on the matter.

But council officials who spoke on condition that they not be named said the new fees will be part of a supplementary budget to be tabled soon.

"This literary means that the rate payments for everybody will increase by that 42 percent, that's the only way council can cushion itself against the skyrocketing costs.

"After the council meeting, we will just need time to advertise the budget as well as consultations before we finalise it and that would take round about one-and-half a month for us to have the new budget," said a council official.

With council struggling to provide water, pushing through drastic service cuts, and facing criticism over the move to sell residential stands in United States dollars (USDs), the potential increase may not go down well with ratepayers.

No local authority across Zimbabwe has taken up the option, despite many facing financial problems.

The Bulawayo City Council (BCC) is struggling to balance its books after formulating a $212,25 million 2019 budget under a totally different monetary regime that subsequently saw central government adopting stringent austerity policies in response to the financial crisis.

City fathers have said since the announcement of the 2019 budget in October last year, the Reserve Bank of Zimbabwe has established an inter-bank foreign exchange market to formalise the trading of Real Time Gross Settlement (RTGS) balances, bond coins and bond notes with USDs and other currencies on a willing-buyer willing-seller basis through banks and bureaux de change.

There has also been a 120 percent increase in the cost of fuel against the backdrop of a growing cash crisis and a floundering economy.

Officials said the hard currency shortages, rampant price increases and essential goods shortages amid no indication of any significant growth in the economy point to an impending financial crisis that council may be hard-pressed to avoid.

So tough has been the situation that the council is now struggling to collect refuse, make repairs on various amenities and attend to emergencies.

Last month, BCC raised a red flag over an intermediate money transfer tax or two percent tax on electronic transactions introduced by the government in October saying it has been a drain on its coffers – siphoning as much as over $200 000 in weeks.

"So far we have paid $215 971 for the 2 percent tax. One can say that is a little when it comes to council but that is a lot of money we collected and that is a day's collection. That money can do a lot when we have it on our hands.

"Unfortunately, when we came to the 2 percent, the government rated us like everyone, which is a pain in our pockets too," finance director Kimpton Ndimande complained last month.

By November last year, the local authority's debtors' bill was sitting at $178 million against a creditors bill of $180 million.