Company closures cripple revenue base

The Zimbabwe Congress of Trade Unions says that at the end of November retrenchment figures stood at 300 every week due to company closures or scaling down of operations.

Muzuva told The Zimbabwean that the city council relied on the industrial sector for the bulk of its revenue.

“Companies contribute huge amounts of revenue mainly through operational licences and water rates. A company such as Natbrew can pay up to $300,000 per month, so five companies closing can result in revenue shrinking by as much as $1,000,000,” he said.

Council continues to experience problems with domestic users who default on their payments. “The problem is that for most people the council is not a priority. People would rather take care of school fees, rents and by the time they look at council rates the money would be exhausted,” said Muzuva.

Recently the city council approved a $70 million deal to overhaul the water distribution network and install fibre-optic broadband services. According to council minutes the terms of deal with a South African firm indicate that Harare would only assume total ownership of the infrastructure after 25 years.

“We have to move away from relying on ratepayers for infrastructure development,” Muzuva said, adding that the council wanted to introduce commercial management of its properties in the city.

“We have around 11,500 houses across the city and we want these to be managed on a commercial basis. Presently some people can go for up to seven years without paying rent,” he said.

Muzuva said the houses were being rented at below market value. “A house in Milton Park is going for $62 a month when similar houses are going for more than $500 a month,” he said. He revealed that at the city-owned Trafalgar Court tenants are also paying $60 a month.

“Similar sized flats in the Avenues are going for more than $400. This shows we need commercial management of the properties under a real estate firm”.

Muzuva blamed council directors and other employees for impeding the introduction of higher charges. “The problem we have as policymakers is that those responsible for implementing those changes are the ones who are benefiting from the current system,” he said.

Muzuva added that council had lost control of other revenue earners such as Mupedzanhamo market. “Mupedzanhamo is in the hands of a political party,” he said. The famous market is reportedly in the hands of the Chipangano group, which has close associations with Zanu (PF).

Muzuva said the 2013 directive by the Local Government Minister, Ignatius Chombo, to slash rates owed to municipalities across the country by residents had compounded the council’s revenue woes.

“Those who were paying before the debts were cancelled have stopped paying and those who were not paying are still not paying,” he said. As a result the council cannot pay its workers on time, with many receiving staggered salaries.