Harare City Council backs down on US dollar billing after treasury censure

HARARE – The Harare City Council (HCC) has reversed its controversial decision to bill rate payers in US dollars only following a treasury order for the local authority to abandon the action.

Town House had announced the measure claiming this was a way to preserve the value of the city’s bank balances in the midst of the fast-depreciating value of the local currency.

Treasury pulled rank and ordered the local authority to reverse its decision.

Finance ministry permanent secretary George Guvamatanga accused city fathers of violating Statutory Instrument (SI) 142 of 2019 which prohibits the use of foreign currency for domestic transactions, “except if provided for by the law or if exempted in terms of the Exchange Control Regulations”.

Guvamatanga said the cited SI allowed the local authority to bill clients in US dollars in cases of free funds.

HCC town clerk, engineer Hosiah Chisango said the decision to introduce US bills had been necessitated by the need to hedge the city council from massive exchange losses.

He said Harare is owed ZWL149.3 billion as at 31 May 2023.

According to the city boss, commerce and industry accounted for 51,1 percent of the debt while 41,6 percent was domestic with dormitory towns accounting for 2,91 percent.

Chisango said the huge debtors’ book was negatively impacting HCC’s capacity to provide basic services to residents adding that council income is largely local currency while the expenditure is foreign currency denominated.

“If the situation is allowed to persist, service delivery will collapse because the city will not be able to recapitalise and will also fail to pay for goods and services particularly water treatment chemicals and fuel.

“The drive to recapitalise operations has since slowed down because suppliers are demanding payment in foreign currency which the city does not have.

“In terms of creditors, these stood at ZWL39,3 billion as at 31 May 2023,” said Chisango.

He said HCC was also under pressure to pay employees in foreign currency owing to the prevailing harsh economic situation.