Councils stick to multi-currencies
By Helen Kadirire
Local authorities will continue to accept all forms of payment at government prescribed exchange rates in spite of the pricing madness rattling Zimbabwe’s moribund economy.
Zimbabwe Local Government Association (Zilga) president Killer Zivhu told the Daily News yesterday that councils operate within the confines of the law as they are arms of government.
As such, they will continue to use the stipulated modes of payment even though other operators are now insisting on payment in United States dollars to keep pace with the inflationary pressures caused by rising prices of goods and services.
“Councils will not be using the US dollar unless directed to do so. We are an arm of government and as such we do not act overzealously or based on speculation. Beside that, government still stands with its guarantee that the bond note and US dollar are at par,” said Zivhu.
“It would also be disastrous for us to punish the same people that elected us into power. We are there to serve but if we make life difficult for the people that we are supposed to serve then it defeats the purpose”.
Zivhu’s remarks come as the country has been thrown into a chaos with black market rates for the bond note and the Real Gross Settlement System (RTGS) reaching 500 percent to the US dollar.
Since the announcement of a stringent tax regime by Finance minister Mthuli Ncube last week, Zimbabweans went into panic mode, and shops began to close amid shortages and price hikes.
Cooking oil, which once retailed between $3,20 and $3,50 for a two-litre bottle is now being sold for US$10 per bottle in some shops.
The product has since vanished from the supermarket shelves.
When he presented the Transitional Stabilisation Programme last week, Ncube said Zimbabweans should brace themselves for trying times as government addresses the economic meltdown.
President Emmerson Mnangagwa on Monday further emphasised that for his administration to create a viable and solid economy, government would have to take measures that are painful.
Indeed, the country has been experiencing skyrocketing foreign exchange rates on the black market, consequent price hikes and commodity shortages.
It is now being feared that companies could offload employees, with some already closing shop.
Yesterday, Zivhu said demanding US dollar payments from ratepayers would be detrimental to the operations of councils as residents have no capacity to generate foreign currency.
The Zilga boss said anything that deviates from the current arrangement would have to be debated in Parliament first before anything certain is reached.
Political analyst Ibbo Mandaza said the tax regime introduced by Ncube last week shows that government has run out of ideas in the wake of a ballooning expenditure bill.
By November last year, the domestic debt was $2,6 billion and now it has ballooned to $9,6 billion.
“It only shows that government has run out of ideas and people must demand the $7 billion. Where did all that money go in just a few months? Clearly, government overspending is responsible for the crisis. So why should everyone suffer?” he said.
“There was a policy dialogue last week which Ncube was supposed to attend but he did not. The demand for the $7 billion was the resolution at that meeting. People want to know where the money went; they want an audit.” Daily News.