News / National
Harare City Council loses US$70m per year
30 Nov 2024 at 12:51hrs | Views
The Harare City Council could be losing over US$70 million annually in uncollected revenue due to the absence of a modern Enterprise Resource Planning (ERP) financial system, according to suspended town clerk Engineer Hosiah Chisango. This revelation was made during his appearance before the Commission of Inquiry into the council's affairs since 2017, chaired by retired judge Justice Maphios Cheda.
Over the past five years, the cumulative revenue loss is estimated at a staggering US$350 million. The council's outdated financial system, initially designed for small and medium-sized businesses, and reliance on manual processes have exacerbated the city's financial woes.
Missed Opportunities and Financial Strain
Eng Chisango explained that Harare's annual revenue budget exceeds US$500 million, but the lack of a functional ERP system has limited collections to just 40-50% of potential revenue. He estimated that with a modern ERP system, collections could rise to 75%, addressing the shortfall of US$60-70 million annually.
The absence of an effective system has also contributed to persistent challenges in refuse collection, water supply, and road maintenance, frustrating residents who endure poor service delivery.
Local Innovation Rejected
A US$350,000 ERP system developed by the Harare Institute of Technology (HIT) was proposed to address operational inefficiencies. However, council rejected the cost-effective local solution in favor of a foreign system estimated at US$57 million, which was blocked by the Procurement Regulatory Authority of Zimbabwe (PRAZ).
HIT officials, including Registrar Mr. Herbert Njonga and director Engineer Tererai Tinashe Maposa, expressed dismay at the rejection of their award-winning system. "The locally developed system has been recognized internationally, but the City of Harare has missed an opportunity to empower local talent and improve technological development," said Eng Maposa.
The foreign alternative was not only exorbitantly expensive but also violated procurement laws. The council also faced criticism for attempting to acquire a US$2.8 million billing system, which PRAZ blocked due to non-compliance with regulations.
Calls for Accountability
Residents and experts have raised concerns that senior officials at the City Council may be exploiting loopholes in the manual systems for personal gain. HIT's Eng Maposa emphasized that the absence of robust controls creates room for abuse and inefficiency.
Justice Cheda's Commission heard testimonies about systemic issues plaguing the council, with HIT describing the current financial management as "a recipe for disaster."
Government Intervention
In light of the mounting concerns, the Government has ordered the reconstitution of the ICT steering committee, comprising representatives from the council and the Ministry of Local Government and Public Works. The committee will oversee the ERP system's implementation to address financial inefficiencies and enhance transparency.
The Commission of Inquiry is expected to make recommendations that could reshape Harare's financial management and service delivery, ensuring that the city regains its footing as a functional urban hub.
Over the past five years, the cumulative revenue loss is estimated at a staggering US$350 million. The council's outdated financial system, initially designed for small and medium-sized businesses, and reliance on manual processes have exacerbated the city's financial woes.
Missed Opportunities and Financial Strain
Eng Chisango explained that Harare's annual revenue budget exceeds US$500 million, but the lack of a functional ERP system has limited collections to just 40-50% of potential revenue. He estimated that with a modern ERP system, collections could rise to 75%, addressing the shortfall of US$60-70 million annually.
The absence of an effective system has also contributed to persistent challenges in refuse collection, water supply, and road maintenance, frustrating residents who endure poor service delivery.
Local Innovation Rejected
A US$350,000 ERP system developed by the Harare Institute of Technology (HIT) was proposed to address operational inefficiencies. However, council rejected the cost-effective local solution in favor of a foreign system estimated at US$57 million, which was blocked by the Procurement Regulatory Authority of Zimbabwe (PRAZ).
The foreign alternative was not only exorbitantly expensive but also violated procurement laws. The council also faced criticism for attempting to acquire a US$2.8 million billing system, which PRAZ blocked due to non-compliance with regulations.
Calls for Accountability
Residents and experts have raised concerns that senior officials at the City Council may be exploiting loopholes in the manual systems for personal gain. HIT's Eng Maposa emphasized that the absence of robust controls creates room for abuse and inefficiency.
Justice Cheda's Commission heard testimonies about systemic issues plaguing the council, with HIT describing the current financial management as "a recipe for disaster."
Government Intervention
In light of the mounting concerns, the Government has ordered the reconstitution of the ICT steering committee, comprising representatives from the council and the Ministry of Local Government and Public Works. The committee will oversee the ERP system's implementation to address financial inefficiencies and enhance transparency.
The Commission of Inquiry is expected to make recommendations that could reshape Harare's financial management and service delivery, ensuring that the city regains its footing as a functional urban hub.
Source - the herald
