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Local authorities miss out on cheap RBZ funds

Loughty Dube

ZIMBABWE’S cash-strapped local authorities have failed to access a $20 billion central bank working capital facility set aside for them two months ago to fund development pr

ojects, the Zimbabwe Independent has learnt. The funds, part of an estimated $165 billion set aside by the Reserve Bank under the Productive Sector Facility for the utilities sector, are still lying idle in the central bank’s coffers.

Most local authorities are currently trying to source funds on the money market to finance capital projects.

RBZ deputy governor Nicholas Ncube confirmed that the central bank’s $20 billion facility for local authorities had not been used since it was established in the first quarter review of the monetary policy.

“Not a single local authority has applied to access the funds and if any of them apply the money will be disbursed on a first come first served basis,” Ncube said.

He said the local authorities needed to produce externally audited accounts for 2003 accompanied by turnaround plans before they could access the money.

The funds, according to the RBZ, are meant to spearhead development initiatives that include housing projects, road networks, and commercial and industrial land development.

The cash facility would be a relief to many as none of the country’s local authorities has managed to raise the money they need to fund capital projects, some of which have been in limbo for some years.

Contacted for comment on why the Bulawayo City Council had not applied for the money when it was seeking over $100 billion on the open market, the city’s executive mayor, Japhet Ndabeni Ncube, said he was not aware of the facility.

“That is news to us. The council is not aware of this facility because this whole thing was not publicised. But we are going to apply now that we know so that we can be considered by the Reserve Bank,” said Ncube.

However, a source in the Urban Councils Association of Zimbabwe told the Independent that most local authorities’ books were not externally audited and that they did not have turnaround strategies.

“Most of our members do not have externally audited books and that will create a problem when they try to access the funds. Moreover most of them have no turnaround strategies except to increase levies on residents,” said the source.

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