Recently the Harare City Council (HCC) applied to get permission to charge leases, rentals and council land in foreign currency. This they did in the hope that they would increase their capacity to deliver their services to the city of Harare. This was premised on the rationale that the local currency is mercurial and thus is not sustainable. However, the finance ministry has turned down their application. The finance ministry’s stance was informed by the statutory instrument (SI) 213 of 2019 – pertaining to Exchange Control Regulations. This SI stipulates that domestic goods and services dealings must be denominated in the local currency (ZWL$).
Here Is An Extract Of Minutes From An HCC Meeting
“The committee now considered a letter dated 5th December 2019 from the Permanent Secretary for the Ministry of Finance and Economic Development and addressed to the Town Clerk wherein had advised that the country had adopted a mono-currency system through Statutory Instrument 142 of 2019 which clearly stipulated the exclusive use of the Zimbabwean dollar for all domestic transactions without exception. The Permanent Secretary had therefore not acceded to the City’s request to charge all transactions on land. Concerns had also been raised regarding previous advertisements on alienation of Council land which had been quoted in US dollars and the Town Clerk advised that he would respond advising on the status of the advertisements.”
Following all these developments the HCC has since decided to approach and engage relevant authorities regarding this matter. Their hope is that they will be exempted from the provisions of SI 213 of 2019. This is an on-going process and the outcome is yet to be communicated.
We Are Back At This Narrative Again
This HCC example is a stark reminder to the government on how inconsistent its monetary and fiscal policies are. For starters, SI 142 of 2019 has been mainly just a piece of regulations that are not being adhered to. People are basically using foreign currency as a medium of exchange in many circles. It is not surprising why the HCC would point out the need for exemptions on their part. After all, exemptions have been issued for many other players. So in essence, you could say that the HCC has every right to seek exemption. If fast-food outlets can be exempted; why not the HCC regarding their real estate? That is one angle to look at it from – there is however, another key one.
People’s Incomes Are Not Denominated In Foreign Currency
This is yet another factor to consider; an indispensable one at that. The argument brought forward by the HCC with respect to increasing their financial capacity through charging in foreign currency is sensible. However, the very people who will have to pay leases, rentals or for council land might not be in a position to pay using foreign currency. This again brings to the fore the Catch-22 situation of wanting to enact measures to deal with economic turmoil that on the other hand worsen the plight of the citizens.
Corruption And The HCC
Earlier I mentioned about how sensible HCC’s request for exemption is regarding their quest to be financially stable. This can somewhat be watered down by the scandalous nature of how the HCC has been run over the years. If you look at it from a certain perspective you will notice that the push for foreign currency pricing might just be a means to fuel corruption all the more. The HCC has, for the most part, failed to deliver great service to Harare City residents even when the economy was relatively stable. So the corrupt tendencies of the HCC might cast a shadow on the sincerity of their intentions in wanting their real estate components charged in foreign currency.
So we shall see whether or not they will be exempted. Bottom line is, whatever resolutions are arrived at must not further drown ordinary residents who are already struggling as it is. How can a nation’s capital city be famous for having unclean water? It is very embarrassing! On a grander scale government needs to be more pragmatic and empathetic in coming up with monetary and fiscal policies. Those two components are causing untold suffering for most Zimbabweans.