By Staff Reporter
Harare City Council borrowed US$32 500 000 to fund the salaries and terminal benefits packages for its employers in direct contravention of laws governing such acts according to the recently released Auditor General’s report for 2018.
The hefty amounts were borrowed in batches from CABS between 18 November 2014 and 18 November 2018.
According to the records Council borrowed US$15 million in November 2014, US$13 million in May 2015, US$3 million in November 2015 and US$1.5 million in November 2015.
This, the Auditor General said, has the risk of compromising “service delivery if Council borrows for recurrent expenses such as salaries of employees”
Further, Council was supposed to get Ministerial approval but never did contravening the Urban Council’s Act.
“Council should improve the effective management of its revenue producing assets, for example the Crusher Station and other Municipal subsidiaries, which fall under the management of Harare Sunshine Holdings to reduce the dependence on borrowings.
“The Council should seek loans to finance capital expenditure on revenue generating projects and avoid financing recurrent expense using loans”, the report said.
Harare Council has been struggling to provide service delivery with complaints about the bad state of generated water, uncollected refuse and constant burst sewerage.
Some workers from City Council have also gone for months without receiving salaries with some last getting paid in February.
Management has however laid the blame for this on macro-economic challenges which have stifled access to foreign currency, reduced payments from service beneficiaries and eroded the value of the local currency.