Byo council seeks to borrow $180b

Loughty Dube

THE cash-strapped Bulawayo City Council is seeking $180 billion from the market to fund its capital projects that have been in limbo since last year when four financial institutions failed t

o raise funds for development projects.

The council has already applied to the Ministry of Local Government and National Housing for borrowing powers.

The amount sought by the council is a sharp increase from the modest $2,3 billion that it failed to raise after four financial institutions tasked to raise the money were hard hit by Reserve Bank governor, Gideon Gono’s new monetary policy.

The institutions awarded tenders last year to raise money for council were Century Advisory Services, Kingdom Bank, Intermarket and Scotfin. The four institutions have since indicated they will not be able to raise the money.

Latest documents show that the council wants to borrow a whopping $180 billion from the open market to fund ongoing and new capital projects.

Minutes indicate that council has managed to raise only $2 billion under the Public Sector Investment Programme, leaving a shortfall of $178 billion.

“The city treasurer in March advised that the approved capital budget for 2004 for the City of Bulawayo amounting in total to $180 billion required borrowing powers to enable it to borrow from the open market. However, borrowing powers were already being considered under the Public Sector Investment Programme, leaving a balance to be applied for as $ 178 billion,” reads the council’s Finance and Development committee report.

According to the Finance committee report, the city needs about $33,7 billion to fund on-going projects that include sewerage works, road, buildings, public lighting, water works, furniture purchases, plant and vehicles maintenance and for the repair of equipment.

Meanwhile the government and Bulawayo residents now owe the council a total of $13 billion in unpaid rates.

The council in its latest financial reports said residents owe $9,73 billion, up from $6,9 billion at the end of January this year.

Government owes the council $3,3 billion up from the $2 billion it owed council in January. The Ministry of Home Affairs alone owes council $322 million.