Govt challenged to inherit rather than cancel debts

via Govt challenged to inherit rather than cancel debts | SW Radio Africa by Nomalanga Moyo 21 October 2013

Fixed line operator TelOne has become the latest company to announce a bill debt relief for its customers.

A statement on the firm’s Facebook page says the debt relief totalling $80 million, or $258 per household, is in “response to the cash-flow challenges facing the market”, and will be effective from October.

The statement further says customers should settle any outstanding “balances promptly to ensure uninterrupted services”.

This step by the State-owned firm comes hard on the heels of similar debt relief initiatives forced on the country’s 92 local authorities just before the July 31st polls.

Said to be aimed solely at ‘vote-buying’, this move has proved to be very costly for the country’s major authorities which were already struggling with poor revenue inflows and subsequently, service delivery.

Just last week, Bulawayo City Council was reportedly facing serious problems paying salaries and collecting piles of refuse, amid reports that the debt write off wiped out $46 million in what would have been revenue for the authority.

The Harare City Council lost $80 million and has also struggled to pay salaries, with the capital city dismally failing to supply residents with clean, potable water, let alone ensuring a regular supply.

Before ZANU PF issued its debt relief directive, residents and businesses owed Harare $400 million, while Bulawayo was owed $100 million, all lost revenue.

Meanwhile, loss-making power utility firm the Zimbabwe Electricity Supply Authority (ZESA) has announced its own debt relief of $170 million, for farmers and households.

Under the ZESA scheme each household bill would get a $160 reprieve. However, the Combined Harare Residents Association denounced the move, saying the real beneficiaries were the politicians, farmers, and businesses who had been consuming substantial amounts of electricity without paying since 2000.

Even before ZESA announced its relief package, which comes into effect this month, ratepayers had adopted a ‘wait-and-see’ attitude, severely crippling revenue collection.

Speaking to SW Radio Africa Tuesday, political analyst Masimba Kuchera took a dim view of what he said was a lack of accountability on the country’s leadership.

Kuchera said the debt relief scheme was an ill thought-out political gimmick which was plunging the affected companies and municipalities into crisis.

He said this was ‘corruption’ if one considered that the major beneficiaries from the ZESA debt relief were politicians who were the major consumers of electricity on their farms and businesses.

Kuchera also questioned the wisdom of encouraging residents not to honour their obligations, which he said encouraged unaccountability and irresponsibility.

“What the government should be doing is creating jobs and more industries, luring more investors so that people can earn and honour their obligations.”

“Any cancellation that does not involve the government assuming ownership of the debt is no relief at all because one way or another someone will pay, and we are beginning to see the ratepayers bearing the cost as local authorities and parastatals fail to deliver,” Kuchera said.

In other sectors, youths in Chipinge are reported to be demanding a stake at the Chisumbanje Ethanol Plant, a venture partly owned by Green Fuels and the State.

Among the demands, the youths want Green Fuel to contract them as out-growers, train them in various aspects of the company’s operations and ensure that 75% of the work-force is made up of local youths.

Claris Madhuku, of the Platform for Youth Development Trust, said these are not new demands but a reminder for the company to honour its pre-election promises.

“These are issues which had been discussed and agreed on during the unity government. But this new administration has started shifting of goalposts, with the local MP at the forefront of attempts to sideline the youths,” Madhuku said.

Madhuku said Green Fuel has a social responsibility to offer training to the youths, and denied that their demands were akin to the “smash-and-grab” approach which has become all-too-familiar in Zimbabwe since the 2000 land invasions. The youths’ demands come after Green Fuel gave war veterans 250 hectares of land.

Businessman Billy Rautenbach owns a 49% stake in the ethanol plant through his companies Macdom and Ratings, while the government owns the remainder.

Social commentator Mkhululi Moyo slammed what he called the “selfish culture that has emerged over the past two decades where policies reflect narrow, sectarian interests with no regard to the consequences on the whole economy.”

Moyo said the youths’ demands, which also appear to be veiled threats, “are an uncomfortable reminder of how the ZANU PF-led government has conducted negotiations for stakes in private enterprises over the years.”