By BRANDON JOSPHAT and AUSTIN KARONGA
PRESSED Zimbabweans will have to contend with paying their municipal rates in United States dollars or the equivalent in local currency going forward, as more and more local authorities resort to charging for their services in foreign currency.
The country’s two biggest local authorities, Harare and Bulawayo, are among the municipalities pushing hard to be paid in US dollars or the equivalent at the official rate — despite the fact that many of their customers cannot even afford current bills.
Among the other councils that have proposed to charge their services in US dollars or the equivalent at the interbank rate are the Gweru City Council (GCC), Chinhoyi Council and Chegutu Municipality, which contend that it is no longer economical to charge their services in Zim dollars.
All the municipalities proposing to have their services paid in US dollars are citing the continuing volatility of the Zim dollar and the country’s soaring inflation as the main factors behind this push.
This comes as many struggling local authorities around the country are owed billions of Zimbabwe dollars by skint ordinary residents, companies and government departments in unpaid rates.
GCC spokesperson Vimbai Chingwarumusee said the billing of council rates and services would now be done in US dollars at the prevailing interbank rate at the time of billing.
“Looking at the economic situation, we cannot continue relying on tariffs in local currency, but it’s not mandatory that one has to pay their bills in US dollars.
“If you don’t have the hard currency, you are allowed to pay in local currency, but at the prevailing interbank rate.
“We did consultations with our valued stakeholders on July 6 before the ministerial intervention, to find out their thoughts on this proposal and they were in favour of it.
“They said it’s a good move. We cannot continue relying on the old rates for billing tariffs and rates because we will not be able to provide quality service,” Chingwarumusee told the Daily News.
“We need to preserve value for quality service delivery. This is in line with Statutory Instrument SI 118A of 2022,” she added, referring to the legalisation of the dual pricing system in the country.
On Thursday, Chinhoyi Council town clerk, Maxwell Kaitano, also announced that the billing of rates and services would now be done in US dollars.
“The Municipality of Chinhoyi wishes to notify its residents and stakeholders that on 7 July 2022, council resolved to rebase the 2022 tariffs to United States dollars as at the date of budget approval.
“This entails that billing of council rates and services will now be done in United States dollars at the interbank rate as at the time of billing with effect from 1 August 2022.
“Council advises that this is in line with Statutory Instrument SI 118Aof 2022 in a bid to preserve value for improved service delivery,” Kaitano said.
This came after Chegutu Municipality had also notified its residents that due to inflation the council was no longer able to operate using the local currency only.
“Residents, ratepayers, clients and stakeholders of Chegutu Municipality are hereby advised that due to mounting inflationary pressure on all council operations … it has become imperative that the … budget be re-denominated in US dollars for the purposes of maintaining the sustainability of service delivery.
“Through a resolution passed by council on June 20, 2022, therefore, the whole budget shall be re-denominated in US dollars using the rate which prevailed at the time of … approval by the government in February 2022.
“Effectively, all services will be re-based in US dollars and payable at the prevailing interbank rate at the time of each monthly billing.
“Notably, this exercise does not amount to increasing tariffs, but rather maintains them at the budget approval level,” the municipality says.
Meanwhile, the decision by all these local authorities to change their pricing system has not gone down well with many stakeholders.
For example, the executive director of the Gweru Residents and Ratepayers Association, Cornilia Selipiwe, argued that the majority of people in the city earned Zim dollars, which meant that this rebasing of the budget would foment discord.
“I think what needs to be understood is the fact that in Zimbabwe we use Zim dollars as our main currency … What we need to understand is that there are not many companies that are paying their employees using US dollars.
“So, it’s not about us choosing whether we want to use RTGS or the US dollar … There is, therefore, no way where we could opt to use the US dollar because we don’t have the US dollars,” Selipiwe told the Daily News.
She added that the GCC needed to consult widely before making decisions that significantly affected residents.
“In terms of whether we agreed to this move or not, they are just telling us that it’s an SI from the ministry, but we have not seen it as critical stakeholders.
“This defeats the spirit of devolution and citizen participation because, as things stand, we have the local authority in the loop of things but on the other hand we have residents that are not in the loop.
“The greatest challenge that is going to emanate from this is the issue of compliance, the number of people who are going to pay these bills,” Selipiwe said further.
All this also comes after HCC approached authorities last month seeking approval to charge rates and its other services in United States dollars.
This came as the city continued to reel from unpaid debts by residents and ratepayers running into billions of dollars.
“Council notes the proposal for it to peg some of its revenue streams and expenses inclusive of part of salaries for employees in US$ in view of the prevailing inflationary economic environment and it authorises the acting town clerk to write seeking the authority of the minister for Local Government to peg some of its revenue streams and expenses in US dollars.
“Local authorities are not allowed to fix their charges in US dollars only and the 2022 council budget was pegged in local currency and US dollars and charges are payable in the currency at the discretion of consumers or at the prevailing auction rate where billing is based on inter-bank rate,” the HCC said then. – Daily News