Suburban
WARD 7 residents insist that the City of Harare is supposed to provide details of the bank it intends to borrow the $1,3 billion from as well as the terms and conditions of the loan.
Suburban Reporter
The residents said they are objecting to the municipality’s plans to borrow $1,3 billion at this particular time and not its borrowing powers.
They were responding to Harare acting town clerk Engineer Mabhena Moyo who had told them that the city could only know the lender and loan tenure after the Ministry of Local Government and Public Works has granted it the permission to borrow.
Engineer Moyo was responding to the letters of objection Harare residents had submitted to his office last month expressing their concerns over the municipality’s decision to borrow $1,3 billion to fund service delivery.
At least 118 letters of objection were submitted by Ward 7 residents following the publication of the notice to borrow by the municipality.
“In your letter of objection, you highlighted that the city cannot borrow considering that in its notice there is no indication of who the lender is nor the loan terms and conditions. Please be advised that before council can borrow it has to seek consent to borrow.
“Its only after granting of authority to borrow by the parent Ministry will then council be able to determine the lender and loan tenure.
“However, due diligence will be undertaken to ensure the borrowing terms and conditions will be beneficial to the local authority as regards to capitalisation for service delivery,” Eng Mabhena wrote in his response dated April 11, 2022.
But the residents pointed out that they needed to be supplied with all the information on the loan and could not consent to the council’s plans without such vital details.
“We were, in fact, specifically objecting to council’s plan to borrow $1,3 billion to fund services in the city, at this particular time; not to its borrowing powers per se.
To give their meaningful consent Harare residents must be supplied with all the information they need to support or reject a loan including the identity of the lender and the terms and conditions of the loan.
“In our view, it does not make sense to give consent in principle only, and out of ignorance of such key facts. It would be foolhardy or reckless. And that is why we were obliged to reject the proposal, as it currently stands,” the residents told Eng Moyo.
The residents said they were prepared to review their position once the acting town clerk has provided the information.
“We understand that, under the Urban Councils Act (section 290), you are required to give notice and seek consent, before approaching potential lenders, but we strongly feel that the consultation process is incomplete until and unless all the key loan details are known. And we hope you will provide us with such, as they become available, so that we may review our position.”
The Ward 7 residents also brought to the attention of Eng Moyo the concerns raised by Highlands resident (Ward 8) Engineer Peter Morris that there was inadequate information on how the $1,3 billion was to be used.
“We would also like to take the opportunity to reiterate Eng Peter Morris’ concerns that there is not enough information about what the $1,3 billion to be borrowed is to be spent on, only areas of expenditure,” the residents argued.
They demanded the municipality to inform them on the steps the local authority was taking to recover the billions of dollars it is owed by defaulting ratepayers because the debts if collected could reduce the amount the city needs to borrow.
“Finally, we hope that you will at the same time indicate the steps you have taken to collect the backlog mountain of debt that the council is carrying, which are likely to reduce considerably the amount the city needs to borrow.”
Ward 7 Ratepayers and Residents Association vice chairperson Mr John Vekris delivered their letter responding to Eng Moyo at Town House on Wednesday this week. When Ward 7 residents voted to object to the borrowing plans, they said if the City of Harare was truly consulting them, they should either do so both before and after or only after they had identified a lender and the full financial implications are known.
In March, the cash-strapped City of Harare gave notice to residents and stakeholders of the capital city to borrow $1,3 billion to fund service delivery in the wake of the continued collapse of services in the capital city.
The money is meant to fund services ranging from waste management, water, health, roads infrastructure, traffic management, public lighting, repairs of Rowan Martin Building, service vehicles, information communication technology, revenue collection, corporate communication, emergency services and social amenities.
Residents immediately queried the decision without addressing fundamentals for revenue collection while also expressing concern over the allocation of the borrowed funds.
Combined Harare Residents Association programmes manager Mr Reuben Akili said the association was of the view that as long as there are no fundamentals that encourage ratepayers to pay rates the local authority will continue to borrow year in year out.
In his objection letter, Engineer Morris argued that officials at the Highlands District Office failed to provide information about the proposed borrowing powers.
He said he submitted a letter dated March 30 requesting for details of the proposed projects to be funded using the loan such as analysis of how repayment of the loan would impact rates. Council officials promised to respond to Engineer Morris by March 31, 2022 or April 1 2022 at the latest but did do so by the stated dates.
