Revenue woes cripple Harare 

Source: Revenue woes cripple Harare | The Sunday Mail

Tefoma workers rehabilitate a stretch off High Glen Road near St Peter’s Kubatana High School in Highfield, Harare, under the Emergency Road Rehabilitation Programme Phase 2, yesterday. — Picture: Memory Mangombe

Nokuthula Dube

THE Harare City Council collected only 40 percent of its targeted revenue between January 2024 and September 2024, severely affecting the local authority’s ability to deliver essential services.

Harare raised ZiG2,01 billion against a billing target of ZiG5,06 billion, with revenue collection efficiency averaging 35 percent in the first two quarters of the year before improving to 52 percent during the third quarter.

Council attributes its revenue collection challenges to the absence of an enterprise resource planning (ERP) system, which has hampered efficient billing and payment processing.

Presenting the city’s 2025 budget last week, Finance and Development Committee chairperson Councillor Costa Mande said Harare’s debtors grew by 9,9 percent in September alone, from ZiG2,55 billion in August to ZiG2,75 billion.

“Total revenues for January 1 to September 30 amounted to ZiG2,01 billion against a billing of ZiG5,06 billion,” he said.

“Revenue collection was subdued in the first and second quarters, with average collection efficiency of 35 percent.

“The third quarter witnessed significant improvement to 52 percent compared to the average of 35 percent that obtained in the previous quarters.

He said, as a result of constrained cash flows, there was significant shortfalls in both recurrent and capital expenditures.

By the end of September, the council had spent just 10 percent of its targeted capital expenditure for the year.

“Hamstrung by cash flow challenges, there was a significant growth in creditors as the city struggled to pay for immediate recurrent expenditure, mainly water chemicals and power,” he said.

Cllr Mande said the debtors book grew significantly, exacerbated by the recent exchange rate depreciation.

“Debtors stood at ZiG2,75 billion as at September 30, 2024, from the August 31, 2024 position of ZiG2,5 billion.

“Debtors increased by 9,9 percent from the previous month position growth,” he said.

“The debt configuration is as follows: commerce, industry: 66,13 percent; domestic: 26,63 percent, Government: 3,09 percent; and dormitory towns: 3,91 percent.

“Creditors stood at ZiG716 million as at September 30, 2024, excluding leave pay obligations from the January 1, 2024 position of ZiG109 million.

Council creditors continues to rise as we face cash flow constraints.”

He said electricity charges constituted 35 percent of the total creditors.

Cllr Mande said the council had an outstanding obligation of a US$68,6 million loan facility from Exim Bank of China for the Morton Jaffray Water Treatment Plant rehabilitation project.

In brief . . .
Harare collects only 40 percent of targeted revenue
Absence of ERP system hinders efficient billing
Financial constraints impact service delivery
City owed ZiG2,7 billion
Industry, commerce account for bulk of debt