When the Government initially announced it was ordering local authorities to write off all debts accrued by residents since the adoption of the multiple currencies in February 2009, many dismissed the directive as grand standing ahead of the harmonised elections. Others thought that the issue would die a natural death once the victors of the polls had been announced. Now that the elections results are known, Local Government, Rural and Urban Development Minister Ignatius Chombo is adamant his directive still stands.
We believe it would be wise for all local authorities to comply with the directive rather than try to play with semantics and technicalities to reduce their exposure. While some local authorities have seen the futility of defying the directive and have started writing off some debts, we are disappointed that they are trying to look for loopholes where there are none in order to cut their losses.
A number of local authorities have come up with a strategy where they partially write off bills, leaving the water bill intact. It’s not a secret that the water account is the cash cow of most local authorities and if residents were to remain indebted to local authorities over their water bills, the gesture by government to write off bills would be meaningless.
As such we commend the stance by the Minister that all bills that fall under local authorities should be written off.
“They should write off all bills under their jurisdiction including water,” Dr Chombo was quoted in a story carried by Chronicle on Saturday. The minister’s comments should clear any confusion which local authorities wanted to create.
Ordinarily, we would pity councils which would be forced to lose millions of dollars at the stroke of a pen as this would affect their operations. However, in the case of our local authorities very few, if any, deserve our sympathy.
When the multiple currency system was introduced, many came up with rates and tariffs reminiscent of the Zimbabwe dollar era. To most councils, the introduction of multiple currencies presented an opportunity to come up with outrageous rates that would milk ratepayers so that local authorities could pay hefty salaries and perks to their workers.
It is no secret that most local authorities pay salaries which even profitable private companies can not afford.
A few months ago, the Competitions and Tariff Commission launched an investigation into the tariff structure of the Bulawayo and Harare city councils following concerns that the two local authorities were abusing their respective monopoly to overcharge. It seems the minister’s directive has vindicated the commission.
We believe that local authorities, instead of procrastinating, should count their losses and plan the way forward. The councils can still survive financially despite having written off millions in debts at one go.
Since every domestic consumer is now starting on a clean slate, we believe that councils need to strengthen their debt collection processes. Residents should be made to pay rates and other bills on time. If a balance is 60 days over due, measures must start to make sure that the money is recovered.
These measures can include engagement of debt collectors or suspension of services such as water provision. Councils need to avoid the situation which prevailed before where rates were unpaid for months and even years, resulting in an unsustainable debt burden on the part of residents.
Ratepayers must also not abuse the gesture extended by the Government in the hope that a similar directive would be issued in the future. To encourage ratepayers to continue paying rates on time, those who paid their bills on time need to be also rewarded so that they don’t feel that they are being punished for being compliant.
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