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State orders council to suspend rate hikes
The Herald (Zimbabwe)
June 29, 2004

http://www.herald.co.zw/index.php?id=33356&pubdate=2004-06-29

Government yesterday ordered the Harare City Council to freeze rates, service and supplementary charges at levels applicable to the first quarter of this year and to rebudget before any further increases can be approved for 2004.

The suspension of rate and other increases and the need to rebudget were deemed necessary in view of much lower inflation and stable exchange rates since the original budget projections in October last year.

In a statement, the Minister of Local Government, Public Works and National Housing, Cde Ignatius Chombo, said the Government had considered the concerns of ratepayers over the proposed increases of up to 1 000 percent and directed council to freeze the increases.

Cde Chombo directed council to continue charging rates it was charging in the first quarter of this year.

"It is understood the (proposed) charges were arrived at based on projections that prevailed at the compilation of the estimates in October 2003, that predicted a rate of Z$15 000 for US$1 by December 2004," Cde Chombo said.

He said the proposed increases were unjustified because the Zimbabwe dollar had since stabilised against major currencies following the announcement of the new monetary policy by the Reserve Bank of Zimbabwe in December last year.

Prices of some goods had gone down owing to the strengthening of the Zimbabwe dollar, the minister said.

The average rate of the local unit at the auction floor has been around Z$5 000 to the greenback.

"Coupled with this, has been the assistance of Government in the procurement of goods such as water treatment chemicals, at the Government rate of Z$824 to US$1.

"It is felt therefore that recently announced increases on the part of the Harare City Council are largely unjustified. The Harare City Council is now directed to charge only those charges that should have applied for the first quarter of 2004."

Cde Chombo said the Government was also helping council to repair roads and had given it $10,7 billion for water, sewage and related works.

He said in view of this, council should revise downwards the proposed increases and the Government would only allow modest increases that were in line with inflation and to accommodate salary increases.

"Subsequent increases that had been planned for quarterly implementation are therefore declared invalid.

"Accordingly necessary amendments to gazetted statutory instruments will immediately be effected. It should be noted this is not unique to Harare City Council alone," said Cde Chombo.

Early this month, Cde Chombo ordered Bulawayo City Council to freeze proposed rate and levy increases, which were scheduled to come into effect next month.

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