PRESIDENT Robert Mugabe’s populist policies that saw him ordering the scrapping of utility bills is set to boomerang in the long run as it emerged this week that Zesa and municipalities have already lost approximately US$3 billion in revenue as a result of his 2013 “philanthropic” election campaign.
The move saw local municipalities writing-off domestic water bills and rates incurred between February 2009 and June 2013 after Mugabe argued that the harsh economic environment had disadvantaged many ratepayers.
The hardest hit by Mugabe’s order are the 92 local authorities which are jointly owed US$2 billion while Zesa, which has more than US$800 million locked in debts, will lose US$170 million through debt cancellation for farmers and domestic consumers.
The Zimbabwe National Water Authority (Zinwa), which is owed over US$100 million by local councils countrywide, is yet to scrap the bills following recommendations for them to do so by Vice-President Joice Mujuru and Local Government minister Ignatius Chombo.
Councils, Zesa and Zinwa heavily rely on rates and other charges, and the debt cancellation will negatively impact on water and electricity supplies as well as sewerage reticulation.
On Tuesday Zesa slashed domestic debt to the tune of US$160 for every household while writing off a collective US$80 million owed by farmers, but consumers are expected to settle balances monthly.
However, Zesa spokesperson Fullard Gwasira allayed fears the debt cancellation was likely to affect electricity supplies saying the utility planned to install prepaid metres in every household countrywide by December to speed up the debt recovery process.
Gwasira said about 300 000 households in the country, which represents 57% of domestic consumers, were already using prepaid metres while Zesa has already started installing prepaid metres at farms with a power rating of 50kVA.
“The writing off of debts won’t affect our operations because with the usage of prepaid metres we will be able to recover some of the money locked up in consumers. There is no losing out,” Gwasira said.
However, councils say they will be hit hard by the debt cancellation. In the run-up to the July 31 elections, Chombo under instruction from Mugabe, ordered councils to scrap bills in a move seen by political pundits as blatant vote-buying.
In the process, Harare City Council lost more than US$166 million, followed by Bulawayo City Council which bled US$46 million, Masvingo City Council US$6,7 million, and Masvingo Rural District Council US$4,8 million.
Victoria Falls Town Council cancelled US$3,6 million and Mangwe Rural District Council reversed a US$2 million debt, among other local authorities.