BCC embraces ZiG, gets rid of 80 percent forex payments

12 May, 2024 - 00:05 0 Views
BCC embraces ZiG, gets rid of 80 percent forex payments Mrs Nesisa Mpofu

The Sunday News

Vusumuzi Dube, Online News Editor

THE Bulawayo City Council (BCC) has backtracked on its resolution to demand 80 percent of bill payments in foreign currency and has since embraced the recently introduced Zimbabwe Gold (ZiG).

Responding to questions from Sunday News, the local authority’s corporate communications manager, Mrs Nesisa Mpofu said residents could now pay their bills in any currency of their choice without a stipulated percentage of forex.

She said council was receiving an average of 36 percent of its revenue in ZiG.“The current City of Bulawayo policy on payment of bills is that customers can pay in the currency of their choice.

“Last month the inflows were 36 percent ZiG and 64 percent foreign currency while for May 2024 — as of 7 May — the inflows have been 38 percent ZiG and 62 percent foreign currency,” said Mrs Mpofu.

In February councillors passed a resolution compelling residents and businesses to pay 80 percent of their rates in foreign currency, arguing that service providers were demanding forex. The resolution effectively meant residents were meant to pay just 20 percent in local currency.

However, the Ministry of Finance, Economic Development and Investment Promotion later red-flagged the directive and ordered the local authority to reverse the move.

Permanent Secretary in the Ministry, Mr George Guvamatanga, said the resolution was against Government policy on the use of the dual currency system, which stipulates that the transacting public is free to pay using either of the currencies in the basket, including the local unit.

Meanwhile, the local authority has reported that they recorded a 30 percent increase in debtors while 43 percent of revenue collected was going towards employment costs which defied the Government stipulated ratio of 70 percent service delivery to 30 percent employment costs.

According to the latest council report, the council debtors’ balance increased from US$45,8 million to US$52,5 million.

“From the revenue collections, 43 percent went towards employment costs. Payment to contractors took eleven percent of the cash collected and US$2,8 million of the revenue was carried forward to April 2024.

The carried forward figure was immediately applied in April to settle PAYE, VAT and casual workers’ salaries which are paid in the first week of April.

“There was a 30 percent increase in debtors from US$45,8 million to US$52,5 million. The creditors increased from US$13,2 million to US$13,6 million at the end of the month.

Zesa was the largest creditor at US$9,7 million (71 percent) followed by trade creditors at US$1,5 million (11 percent) and the other creditors below 10 percent. Zesa will remain council’s largest creditor until the dispute is settled,” reads the council report.

The local authority attributed the debt increase to the continuous rebasing of tariffs and the resource constraints in the debt management section.

According to the figures provided by BCC, domestic users owe US$32,8 million (62 percent), industry and commerce; US$15,7 million (30 percent) while Government departments owe the local authority; US$4 million (8 percent).

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