Bulawayo councillors are against a decision by council management to hike the price of residential stands by almost 1 000 percent, after factoring in inflation costs and converting amount to the interbank foreign market exchange rate.
The price hike will affect those residents who are still owing money for their residential stands and were paying in installments.
According to the latest council minutes, the management decided to backdate the residential stand price hikes to February 2019.
But this was opposed by Deputy Mayor and Ward 3 councillor, Tinashe Kambarami, who during last week’s full council meeting said such a move would overburden residents more.
He acknowledged that the rate of inflation was going up always but empathised with residents, who genuinely needed houses.
“The city council has a mandate to provide housing facilities to the residents without taking advantage of their desperation. We do understand that council as an organisation is heavily affected by inflation but we must not take this out on struggling residents,” Kambarami said.
He explained that if council were to backdate what was owed to them, the figures would be more confusing given the unstable exchange rate.
“According to the management, those in arrears would have to pay what they owe for the backdated months against the prevailing interbank rate but who know what the rate was then,” the deputy mayor posed.
“For example, if someone bought a stand for ZW$25 000 when the rate of the US dollar and the bond note was still 1:1 and they made a deposit of ZW$5000 then that would mean they owe ZW$20 000.
“But now if one were to use the suggested interbank market rate, which now stands at 10 or above, this person is likely to pay more than ZW$200 000. That is too high for an individual who already was struggling with ZW$20 000,” he said.
The deputy mayor said it was unfair for the management to backdate their credits to February 2019 considering that the government introduced Statutory Instrument 142 of 2019 in June.
He suggested that council management rely on Clause 10 of an offer letter, which allows for stands to be raised by 100 percent.
“Clause 10 of offer letters states that the maximum increase should be around 100 percent. This will be fair to residents. In light of the economic situation, we need to continuously engage with beneficiaries so that everyone understands what is happening.
“As an organisation we must not overburden residents who genuinely failed to settle their arrears because the salaries were eroded by inflation,” Kambarami said.
He noted that when the city council resolved to sell Selbourne Park stands in foreign currency, it was agreed that surplus from the sales would cover other expenses from existing projects.
“Our mandate is to provide services to the people by making sure they move into houses. We are supposed to sell serviced stands to our people but at the moment we are doing a disservice to them by taking their money and using it to service their stands,” he said.
Finance Committee Chairperson Ward 1 Councillor Mlandu Ncube weighed in to say the price hikes should be communicated to residents but the challenge was some people failed to attend meetings.
“At times most of those who owe council do not attend meetings and it becomes difficult for us to make decisions without their input. Continuous engagement are also a better option because it helps residents encourage each other to pay debts. They would police each other and make sure their rates are paid in time,” he said.
