HomeBusiness DigestGovt debt to Byo reaches $1b

Govt debt to Byo reaches $1b

Loughty Dube

THE cash-strapped government’s debt to the city of Bulawayo has reached the $1 billion mark as the council intensifies efforts to recover the money it is owed by various dep


According to a council report released early this week the government total debt is an accumulation of service charges that arise from unpaid health grants, water sampling charges, rates for leasing property, sewerage and refuse collection charges by government departments in the city.

The Ministry of Rural Resources and Water Development is the biggest debtor, owing council over $144 million closely followed by the Ministry of Home Affairs which owes $84 million while the Ministry of Education and Culture owes a further $45 million.

The Bulawayo city treasurer Middleton Nyoni said council would resort to the traditional methods of sending constant reminders and if those failed then council would disconnect water supplies and terminate other services in government departments.

“After the increase of tariffs this year the government debt to council rose as a result of the new tariffs and other unpaid bills but we are making frantic efforts to persuade the government to pay up,” Nyoni said.

The latest figure of $1 billion is an increase of the government debt to council from $893 million that it owed council at the beginning of May this year.

However, the Bulawayo council is owed a further $3 billion by residents and local rate-payers in unpaid bills, but this is a reduction of the $4 billion residents owed council in May this year.

The council late last year disconnected water supplies to government departments in a bid to recover the money it is owed by government.

The Bulawayo city council has had to resort to going into the money market to seek over $2,5 billion it needs to finance its capital projects that have been stalled as a result of lack of funds.

Four financial institutions – Century Advisory Services, Intermarket Building Society, Scotfin Ltd and Kingdom Financial Holdings Ltd – in August won the tender to raise the $2,5 billion for the council’s capital projects.

Council capital projects that have been shelved as a result of cash shortages include the sewer repairs project, water reticulation, repair of public infrastructure and the council’s Millennium Housing Project.

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