Broke councils write off debts

via Broke councils write off debts •Industries, corporates set to benefit •Move tailored to buoy bill payments | The Herald August 20, 2014 by Innocent Ruwende

Most local authorities have resolved to write off debts and offer up to 50 percent discounts to commercial, industrial and institutional customers as an incentive to encourage them to settle their debts. This comes against the backdrop of serious defaulting by these institutions, which are citing the prevailing economic challenges.

However, the reprieve will not benefit residents as councils said they benefited from a Government directive to cancel debts shortly before the July 31, 2013 harmonised elections.

Most councils say they are failing to provide basic services as they are owed over US$500 million in unpaid bills by residents, Government departments, industry and commerce.

Government and residents are the biggest debtors, councils say.
However, some of them have decided to offer between 40 and 50 percent discounts as a way of encouraging the payment of bills, while others are going back to the drawing board to ensure that customers pay outstanding bills.

Harare mayor Councillor Bernard Manyenyeni, yesterday confirmed that the city would have a special financial performance improvement review early next month.

“We will carry out an in-depth assessment of the possible options to keep council afloat. How do we enhance our revenues, how do we contain our costs? We are looking for a fresh look at council numbers as the only way we can return to effective functionality,” he said.

In February this year, Bulawayo City Council offered 50 percent discount for corporates settling accounts by end of June and they have since extended the deadline.

“We have since extended the deadline to September this year,” said Bulawayo mayor Clr Martin Moyo.
Bulawayo is the country’s industrial hub, but firms have been struggling due to multiple factors.

Gweru town clerk Mr Daniel Matawu, in a statement said the city would write off 50 percent of rates and service charges on all bills for industry, commerce and institutions outstanding as at December 31 last year if they paid 50 percent of the outstanding amounts during the promotional period (July to December 2014).

“City of Gweru has resolved to grant debt relief to all customers in the above categories for the period July 2014 to December 2014 due to liquidity challenges facing our clients and economy at large.

“Affected ratepayers and debtors who fail to embrace the relief measure would have full areas owing to council restored after the lapse of this grace period,” said the city’s town clerk Mr Matawu.

He said upon the lapse of the promotional period, the city would engage into serious legal and permissive method of engaging the messenger of court for the attachment and subsequent auctioning of defiant debtors’ assets without further notice.

In a public notice, Kadoma said it was offering 40 percent discount to business, industry and institutions provided they paid 60 percent of the total amount owed by October 31 and if they kept their accounts up to date for the 10 months starting January to October 2014.

Bindura mayor Clr Innocent Zvigumbu, said business, industry and institutions were offered a 45 percent discount as a revenue boosting measure.
“We offered them a 45 percent discount and we have since agreed on some payment plans to those who took up the offer. We are going to use the legal route on those who continue to default,” he said.

Gweru is owed $24 million by residents, Government departments and the business community.
Residents owe $8,19 million, industry $7,8 million, Government $6,7 million and the commercial sector, $1,05 million.

As of May, Government departments owed Harare $15,5 million, industry and commerce $130 million, while the satellite towns of Chitungwiza, Norton, Ruwa and Epworth owed a combined $3,4 million.

Since Government cancelled debts in July last year, some residents have not been paying their bills and as a result the combined debt for water only escalated to $91,6 million in Harare.

The city bills go up to $24 million every month, but council is only able to collect $11 million.
Ratepayers and Government owe Masvingo City Council more than $23 million while Masvingo is owed $28 million.


  • comment-avatar
    Tongoona 8 years ago

    Statement “Since Government cancelled debts in July last year some residents have not been paying their bills and as a result the combined debt for water only escalated to $91.6 million in Harare.” From July 2013 to July 2014 it is 12 months. We thank the Government but tell the residents total debt cancelled bearing in mind that after the cancellation, bills started from zero in August 2013 or last year. In the 12 moths July 2013 to July 2014 debt for water only grew from zero to $91.6 million in Harare alone. This works out at $7.6 million per month. As residents we know you have not been reading our water meters consistently we also know your water delivery has been virtually zero hence there are so many wells and boreholes in Harare. Therefore your figures are, by and large, the result of guess work. We also know that you cannot correctly cost rampant water losses through leakages. If you have a cost figure of water lost through leakages then it is to your account not that of residents. In short we don’t think your account of residents indebtedness to your municipality of $7.6 million per month or $91.6 million per year is correct. Due to the dubiousness of your statement of account, we advise that you cancel this debt before lawsuits smother your municipality.

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    Mlimo 8 years ago

    Why pay for anything no one does in Zimbabwe it’s a free country no taxes, no laws, no governance, no police, nothing’s it’s all free come help yourself. Oh sorry the donors list needs to be replenished as we have used up all the donor funds but never mind it’s all free. Electricity water roads, minerals, land farming implements, just steal them if the owners don’t want to give them to you. That’s the meaning of liberation everything for free

  • comment-avatar

    Commercial property Rates in Harare are the highest in the region: 2.5 % of the property value per year, as compared with Johannesburg 1 %.
    Some businesses pay more in Rates than in Rentals !!!
    Service delivery is amongst the worst in the world. Large parts of the city in the northern and eastern suburbs have not had piped water for 10 years. The water crisis is set to escalate dramatically when groundwater runs out entirely in 2 or 3 years time.
    Street lighting? What is that? It can be seen if you drive past State House but nowhere else.
    Councils should not cry – they should deliver.

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    Time to start the Zim chapter of Malema’s EFF (Everything For Free) party.

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    How come debts are not cancelled in Bulawayo. Old people have water cuts for unpaid bills and no one cares what transpires with them; others have their belongings attached and removed by the Council…yet the government departments and the rich are being coerced with 50% discounts to paying their bills? Things are really up-side-down in Zimbabwe for the old and for the poor. Unbelievable!