The Sunday News
Sharon Chimenya, Masvingo Correspondent
The Masvingo City Council says it is finding it difficult to provide the requisite services arguing that their 2022 budget has buckled under inflationary pressure and was considering an adoption of cost cutting measures.
Acting Finance Director Mr Danister Jori said in the latest Finance and General Purposes Committee minutes that the local authority does not have any other means of generating foreign currency other than the estate account.
He said that the city fathers were failing to offer service delivery as they don’t have foreign currency and has proposed that council consider charging sundries in foreign currency. Masvingo City is also having challenges paying its creditors.
“It was noted that only one supplier was accepting payment of fuel in local currency which exposed council to potential failure to provide services in the event that they ceased accepting ZWL for fuel purchases given that council had no sources of foreign currency other than the estate account.
The Acting Finance Director highlighted the impact on process of the rising auction rate and the black-market rate in the foreign exchange market and further highlighted that most service providers were now indexing their prices on the black-market rate, demanding cash upfront or in some instances demanding payment in hard currency.”
He said at the current tariff levels, water was recording a deficit of six percent and refuse collection a deficit of 45 percent hence the need for Council to consider coming up with a Supplementary Budget for the year 2022.
The Acting Finance Director reported that with the rising cost of living, Council employees were likely to request part payment of their salaries in foreign currency similar to the remuneration package for civil servants to cushion themselves against the effect of a depreciating local currency and rising prices.
The Acting Finance Director reported that to mitigate against the effects of the above economic environment, council was adopting strict cost cutting measures, intensifying debt collection and enforcement of lease rental provisions.
The need to engage stakeholders and discuss the way forward regarding the current situation was highlighted,” read part of the minutes.
Foreign currency
Meanwhile, the local authority has approved the purchase of foreign currency from the estate account for the procurement of two pick-up trucks. The Acting Finance Director has sought for foreign currency amounting to US$70 000 for the procurement of the two trucks.
“The committee adopted the recommendation of management for the payment of various suppliers owed from the main account and transferring the equivalent amount from the Estate Account (Nostro) to the main account (USD Nostro) at the auction rate as at 6 May 2022.”
