Gweru joins forex bills bandwagon

17 Jul, 2022 - 00:07 0 Views
Gweru joins forex bills bandwagon Vimbai Chingwaramuseve

The Sunday News

Patrick Chitumba, Midlands Bureau Chief
GWERU City Council has joined a bandwagon of local authorities in the country that are now indexing their bills in foreign currency with ratepayers being able to settle their bills and services using the prevailing auction rate.

City of Gweru’s 2022 budget has depreciated by over 72 percent, a situation that has resulted in the local authority lagging behind in service delivery.

As a result, residents are facing water challenges, uncollected refuse and pothole infested roads.

budget

The Government approved a $4,9 billion 2022 budget for the city of Gweru.

The $4,9 billion budget was equivalent to US$46 million as of 15 November 2021 being the date of submission for approval to the Minister of Local Government and Public Works at the then auction rate of 105.

City of Gweru communications officer, Ms Vimbai Chingwaramusee confirmed the development.

“We are seeking to comply with Statutory Instrument 118 A of 2022, which directs suppliers of goods and services to charge their goods and services at interbank rate plus 10 percent.

“City of Gweru buys goods and services for its service delivery value chain at interbank rate plus 10 percent and it becomes apparent that it has to recover its costs at interbank rate plus 10 percent. So the City of Gweru seeks to use the interbank rate in payment of bills as a result of the local currency’s volatility,” she said.

Ms Chingwaramusee said the local authority had decided on the move as a means of addressing the mismatch between revenue and expenditure.

“It’s common cause that we have to recover those costs at appropriate rates in the spirit of sustainability. City of Gweru in this instance has a moral obligation out of the abundance of its traditional spirit of courtesy to inform its valued clients that it has since embraced the market directive.

pothole

“The city carried out a going concern assessment and it has revealed that our going concern is severely under threat and the mismatch between revenues and costs cannot continue unabated,” she said.

Ms Chingwaramusee said as a local authority they were aware of the difficulties faced by residents under the prevailing economic conditions.

“The City Fathers are aware of challenges faced by residents, they are aware of what they are going through and as such opted not to come up with a supplementary budget over and above complying with the interbank pricing regime.

“You will note that inflation is also soaring closing at 191 percent for June 2022, so as much as there are price changes due to exchange rate volatilities, there are also changes due to inflation among others, the reason why you reckon there are price changes even in USD denominated prices,” she said.

The council spokesperson said while ideally they would have come up with a supplementary budget they had opted for the route of indexing in foreign currency.

“There is no need for budget consultations because we are not doing a budget neither are we doing a supplementary budget, we are simply moving on with obtaining market fundamentals or market position as regards pricing,” she said.

On Wednesday, Gweru residents allegedly refused to take part in the budget review meeting citing the absence of printed old budget copies and their inability to familiarise themselves with the budget contents on short notice.

Council officials wanted to make a PowerPoint presentation of the budget review, which residents rejected.

Councillor Martin Chivhoko (chairman of the finance committee) conceded to the residents’ suggestion that the meeting be postponed to another date until copies of the old budget report are shared among residents.

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds