Harare to begin $144m loan repayment

HARARE City Council has said it will start repaying its $144 million debt to China-Exim Bank this month, although the bank is still to release the outstanding amount of $72 million.

The $144 million loan facility was obtained for the rehabilitation of Morton Jaffray Water Works and sewer works.

The loan was advanced at an interest rate of three percent per annum and over a nine-year tenure.

In the first four years, the city will service the interest and then thereafter repay the principal amount loaned.

Morton Jaffray rehabilitation works will cost a total of $55 million upon completion, with the remainder of the $144 million loan from China Exim Bank being used on IT equipment, construction and other pump stations.

“A total of $144 million was owed to the Exim Bank of China, of which $72 million had been committed and repayment will commence from September 2017,” finance director Mr Tendai Kwenda told the Finance and Development Committee recently.

According to council’s financial report for the period January to July 2017, the city’s debtors were reported at $686,97 million, while the aggregate income and expenditure for the period under review amounted to $91,13 million.

Actual collections amounted to $12,22 million, while a total of $15,4 million was owed CABS for the period under review.

During discussion, the committee noted with concern that revenue collection was not improving and felt that council had to prioritise capacitating all revenue generation and collection units of council.

“The committee also underscored the need to computerise most functions of council, so as to reduce financial leakages,” reads the minutes.

“The committee emphasised the need to urgently computerise the Lease and Estates Division of Council to enable effective identification of council land/properties, as well as management of revenue generation from such properties.

“There was also need to equally capacitate the building inspectorate and the development control section as these were critical in revenue generation in council. In response, the finance director reported that processes of computerising the valuations at estate division of council were under way to ensure full utilisation of the land management module of the BIQ.”

The committee resolved that efforts be made to capacitate all revenue generation and collection units of council and that reports be submitted to relevant committees.