City Run On Cash Basis
Gweru being run on cash basis
GWERU City Council is running its operations on a cash budget, as it is being denied credit facilities by service providers, who are demanding cash up front.
This was disclosed by acting town clerk, Edgar Mwedzi last week during the 2017 budget consultation meetings.
Mwedzi said the total expenditure for the 2016 budget was $24 million against a budget of $49 million.
“The total expenditure for the year is projected to be $24 431 763, against a budget of $49 949 370, giving a favourable variance of 51%. The total expenditure was constrained by the available cash resources,” he said.
“The city is basically running on cash basis, as they are very few companies offering goods and services on credit.”
The worsening cash crisis has seen firms demanding cash up front for goods supplied and services rendered, further burdening the financially-crippled local authority.
This year, council offered its workers residential stands in lieu of their four months’ salaries and 2015 bonuses due to limited resources.
It also emerged during the consultations that council failed to meet most of its operational targets due to limited cash resources.
Mwedzi also revealed that the city failed to raise additional loans, with capital charges standing at half of that budgeted in the 2016 financial year.
“Capital charges were budgeted for $1 238 232, anticipating new loans from central government. Since the city could not raise any additional loans, capital charges for the year are now expected to be $457 280, representing only 2% of total expenditure,” he said.