The Bulawayo City Council (BCC) has made a resolution that residents and businesses in the city must pay 80% of their rates in foreign currency. The BCC argues that this is necessary because service providers are demanding payment in foreign currency.
However, this decision has sparked conflict between the council and the residents. Some residents are calling for government intervention on this issue. According to a confidential council report, the directive was originally intended to be part of debt recovery measures. However, councilors instead decided to make it the policy for all council bills. This means that residents will only pay 20% of their bills in local currency.
Confirming the resolution, the Town Clerk, Mr Christopher Dube, explained that the decision was made because most of their service providers were demanding to be paid 80% of their charges in foreign currency. The Town Clerk said that the council had no other choice but to implement this measure.
The new policy is that if a resident's bill is US$100, they must pay US$80 in hard currency and the remaining US$20 will be paid in local currency, using the day's bank rate. This move was necessary because all of the council's service providers were demanding either 100% foreign currency or 80% foreign currency, with the rest paid in local currency. The new policy has already come into effect, as councilors have passed the motion.
Regarding the legality of this directive, the Town Clerk stated that there is nothing illegal about it, as United States dollars are considered legal tender under Statutory Instrument 142 of 2019. He also said that people can still pay the 20% local currency portion of their bills, and that everything the council is doing is in accordance with the law.
The new policy has been met with criticism from residents, who are concerned about the implications of paying 80% of their bills in foreign currency. Many have expressed fears that this policy will further strain their finances, as accessing foreign currency can be difficult for many people. The concerns expressed by residents highlight the challenges that the new policy may create for the city and its residents.
Mr Winos Dube, chairperson of the Bulawayo United Residents Association (Bura), expressed surprise at the new directive, calling it unsympathetic to the needs of ordinary people. He said that the policy indicates that the local authority is not pro-poor, but rather focuses on a small, wealthy segment of the population. Mr Dube said that this policy would only serve to further divide the city between those who have access to foreign currency and those who do not
Mr Dube also expressed concern about the policy's impact on the broader economy, stating that the country has not yet officially dollarized. He questioned the local authority's right to impose such a policy, especially given that many workers do not receive their salaries in foreign currency. Mr Dube also highlighted the plight of the elderly and pensioners, who would likely struggle to access the required foreign currency.
Mr Dube reminded the council that Zimbabwe operates under a multi-currency regime, and that local authorities are not free to set their own policies. He said that the council's actions were contrary to national laws, and effectively created a separate, parallel economy. He also pointed out that the government's national budget explicitly addressed the country's multi-currency system, indicating that the council's actions were not in line with the country's fiscal policy.
