MUTARE– City fathers appeal to central government to consider including them in the Reserve Bank of Zimbabwe (RBZ) foreign currency auctions, to bid under lower thresholds, to solve their liquidity challenges.
Mutare Mayor Blessing Tandi made this appeal while addressing a virtual Mutasa South constituency Indaba organized by the Zimbabwe Coalition on Debt and Development (ZIMCODD) to interrogate how local authorities are handling the Covid 19 pandemic response.
Thandi said council was failing to fully meet its service delivery obligations because its creditors require foreign currency, while council collections have significantly declined, negatively impacted by the pandemic.
He said this has affected the municipality’s comprehensive response of decentralizing markets and providing pre-requisite equipment and infrastructure in place in the markets including proper ablution facilities, social distancing monitoring mechanisms, and hand washing facilities.
Thandi also revealed that council is seeking government approval to charge in forex after ratepayers have given council a green light to charge in US dollars during public consultations for the 2021 budget.
“We want government to allow us in the forex auction but the fifty thousand is too much for us as a local authority we won’t be able to raise that amount at once but if it was in batches we can be able.
“The minimum that is needed in terms of bidding we cannot be able to afford that as a local authority, so we will end up applying for the forex from the bank.
“The consultations that we held last week gave us a green light to charge in US dollars, so we are looking at which billable that can be charged in foreign currency,” said Tandi.
RBZ has already introduced a second weekly foreign currency auction system to cater for SMEs which had been crowded out of the main auction as they could not raise the minimum of US$50 000 required to participate.
RBZ said the SMEs will now bid in a parallel auction with a lowered minimum, “Only bids of a minimum of US$2 500 and a maximum of US$20 000 from each bidder per auction shall be accepted. Bidders shall submit only one bid per foreign exchange and submission of more than one bid shall result in rejection of all bids submitted by the concerned bidder,” said RBZ in a statement.
Mutasa South Member of Parliament Regai Tsunga also echoed similar sentiments saying government can also make a special dispensation for local authorities to bid for foreign currency, with lowered minimum bidding amounts.
“I totally agree with the sentiments of the Mayor, maybe government can also allow local authorities just like they are going to allow SMEs, so that smaller amounts for local authorities can invested for bidding purposes,” he said.
City of Mutare Covid Situation Report show that most cases are clustered within the Chikanga residential area which has since become the hotspot for Covid19 within City of Mutare, while local transmissions are on the rise.
The munipalicty says the costs it is bearing is become unsustainable as it is involved in contact tracing and surveillance of over 500 contacts currently under but these efforts have been hindered by fuel challenges.
Fuel is now procured in foreign currency, while there are other overheads of maintaining isolation facilities, costs which the City council said are becoming unsustainable.
“Fuel and vehicle shortages remain the biggest challenge in conducting contact tracing and surveillance thus telephonic surveillance is one measure we have implemented to help mitigate this challenge.
“Cost borne by Council at designated isolation facilities is prohibitive and unsustainable,” said the munipalicty.
