By Staff Reporter
MUTARE- The Reserve Bank of Zimbabwe (RBZ) has been urged to consider making a special dispensation for local authorities by allowing them to bid for smaller amounts at the foreign currency auction system to allow them to raise funds to effectively respond to the Covid-19 pandemic.
Mayor Blessing Tandi made the appeal during a virtual Mutasa South constituency indaba organised by the Zimbabwe Coalition on Debt and Development (ZIMCODD) to interrogate local authorities’ response to the Covid-19 pandemic.
He said the RBZ should consider allowing local authorities to bid smaller amounts at the foreign currency auction system giving an example of the system used for Small to Medium Enterprises (SMEs) at the foreign currency auction.
The Apex bank recently introduced a parallel auction system for SMEs with a minimum bid of US$2 500 and a maximum of US$20 000.
“As a council, we are failing to fully meet our service delivery obligations because our creditors and service providers require foreign currency, while council collections have significantly declined due to the pandemic,” said Tandi.
“We want government to allow us to bid for smaller amounts at the foreign currency auction. US$50 000 minimum is too much for us as a local authority and we won’t be able to raise that amount at once. We end up applying for forex at banks.”
Tandi added that foreign currency shortages have impacted negatively on the council`s comprehensive response to Covid-19.
“We are in the processing of decentralising our fresh produce markets and as such, we need infrastructure such as proper ablution facilities, social distancing monitoring mechanisms and handwashing facilities in place. All our service providers are demanding payment in foreign currency,” said the mayor.
He also said his council was seeking government approval to charge ratepayers in foreign currency after residents gave the authority the nod during the 2021 budget public consultations.
“During the public consultations we conducted last week, residents gave us the green light to bill in foreign currency so that we can improve our service delivery.”
Mutasa South legislator Regai Tsunga weighed in and implored the government to make a special dispensation for local authorities to bid for foreign currency with lowered minimum bids to enable them to effectively respond to Covid-19.
“Government can also allow local authorities just like they are going to allow SMEs to bid for small amounts so that councils can be able to respond to Covid-19 and improve service delivery for its stakeholders,” he said.