As a community newspaper, one of our key objectives is to help residents of Harare connect the dots so that they can get to grips with what’s happening around them and get intimate with their city. In this installment of Financial View, I’ve compiled some pertinent financial facts and figures about Harare which you might not be aware of.
The City of Harare generates its own revenue and does not get an allocation from Central Government.
Most of the country’s Gross Domestic Product (GDP) is generated in Harare, which is at the coalface of the majority of economic activities that happen in Zimbabwe.
At the advent of dollarisation in February 2009, the City of Harare wrote off the entire Zimbabwe dollar denominated debts, financially starting from scratch as it were. In the absence of an exchange rate agreed with its debtors, the City could not convert Zimbabwe dollar denominated balances into US dollar.
The City of Harare has a twinning arrangement with the City of Munich in Germany. Together with Help Germany, Munich provided €600,000 to procure medical supplies that kept the City Health Medical Centres going for 18 months.
The City’s water pipes run for over 5,000km and need an ongoing budget of $50 million in order not to fall into a state of disrepair.
The Harare Mayor’s Cheer Fund, of which the Mayoress is traditionally the patron, raises its donations from both corporates and individuals through various annual events such as My Harare Fun Run and Walk, The Mayor’s Golf Tournament and the Mayor’s Dinner Dance. The Cheer Fund dropped the word ‘Christmas’ to reflect the fact that giving should not be restricted to Christmas.
In 2011, three quarters of council’s budget was accounted for by its wage bill, which took up $7.5 million of Harare City Council’s US$10 million monthly revenue cake.
Over the years Harare City Council has obtained loans from the Development Bank of Southern Africa ($100 million) and The China Export-Import Bank ($144 million) for water and sewerage rehabilitation, though council requires close to $2 billion in order to do a good job of upgrading the city’s water and sewerage reticulation systems.
The $15 million Budiriro Housing Project in which the City of Harare partnered with Old Mutual/CABS will avail 3,106 housing units, though the project cost will amount to much more than $15 million.
The City of Harare has managed to mobilise $25 million worth of support from the Bill and Melinda Gates Foundation. An amount of $5 million went towards upgrading high-density areas like Mbare and Dzivarasekwa. In early 2013, the Foundation made available a $20 million revolving loan facility for the benefit of poor members of the community in Harare.
In the wake of the recent ministerial directive, the City of Harare wrote off an amount of $250 million in respect of domestic or residential individual arrears, benefiting roughly 158,000 households in the process.
The City of Harare did not only write off debts owed by residents; it also had to write off an amount of $14 million owed by its fellow Municipality of Chitungwiza.
The potential monthly income from the City of Harare’s billing activities is around $20 million, and can only be realised if residents and ratepayers play their part by paying the bills on time every time. This amount would suffice for the City’s operational requirements such as salaries, running of refuse fleets, road maintenance/repairs, procurement of water treatment chemicals and many other necessities.
The refurbishment of the 60-year-old Morton Jaffray Water Treatment Plant under the $144 million loan secured from The China Export-Import Bank is expected to ease the water problems facing Harare as the plant would operate at full capacity, producing an average of 640 megalitres per day.
As part of Harare News’ efforts to keep you informed about the city’s financial affairs, in each installment, Financial View undertakes to bring you at least one financial fact you might not know. Keep a look out!