Harare City Council is currently functioning without a comprehensive database of shops and businesses within the city, raising concerns about mismanagement and corruption at the local authority.
This lack of oversight has reportedly allowed council bosses to allocate themselves sectors to manage, potentially lining their own pockets, The Herald can reveal.
Compounding the issue, the city has been without an Enterprise Resource Planning (ERP) system for six years, leading to significant failures in tracking overall cash flows.
As a result, Harare has been unable to collect revenue from its 130 beerhalls for 13 years, with three of these establishments having been corruptly sold due to the absence of a proper database.
The prevalence of fake shop licences has surged, causing the local authority to miss out on potential revenue.
Both legitimate council officials and impersonators are exploiting loopholes in the business licensing department, extorting money and goods from shop owners without licences.
Harare Mayor Jacob Mafume confirmed the absence of a database.
“A contract to monitor those (shops and businesses) was suspended mid-way,” he said.
When pressed to elaborate, Councillor Mafume became evasive.
However, a letter written to Clr Mafume by Ten Ten Tech, which was once engaged by Harare City Council for partial management of its business premises, revealed that in just four years, the private company had collected more than US$20 million.
The system was in operation from October 2017 to May 2021 and provided comprehensive daily reports regarding the revenue that was collected. This allowed City of Harare officials to be fully aware of revenues accrued at all times.
“Over the period that the system was operational a total of US$15 062 851 and ZWL 49 944 432 was collected,” reads the letter.
Ten Ten Tech’s contract was terminated amid a cloud of chaos and presently the company is still seeking to be paid for services rendered.
On his part, Councillor Denford Ngadziore, chairperson of the Small and Medium Enterprises Committee, said that the city is now charging US$50 monthly for small shop licences.
This is a reduction from the previous US$600 licence fee, which he said had become untenable for many small businesses. The new policy allows for charging fees rather than licences, accommodating the numerous subdivided shops in the city.
Yet Clr Ngadziore could not reveal the number of shops that are operating in Harare, which have been accused of snatching customers from established businesses and not paying taxes.
According to Clr Ngadziore, the Ministry of Women Affairs, Community, Small and Medium Enterprises Development recognises businesses operating within a 10 by 10-metre space as fitting under the SMEs policy.
The full implementation of this policy is expected to create an additional 150 000 trading spaces throughout Harare and that could earn the local authority no less than US$7.5 million per month but nothing of that sort exists.
Mr Rueben Akili, director of the Combined Harare Residents Association, linked the lack of a business database to the absence of a functional ERP system, suggesting deliberate negligence to enable arbitrage and abuse.
“The failure by the local authority to have a functional ERP system is deliberate so that people may abuse/loot council resources,” he said.
Mr Precious Shumba, director of the Harare Residents Trust, criticised the council’s management, saying that individual managers are looting money without restraint.
He said, as exposed by the Harare Commission of Inquiry, the chaos within the council benefits corrupt cartels, hampering efforts for proper governance and accountability.
“The city is financially porous and opaque,” Mr Shumba noted.
“Residents are suffering from inadequate water supplies, uncollected refuse and poorly maintained roads while sewer and water pipe bursts are not addressed promptly.”
A special committee report on Rufaro Marketing, which manages council beerhalls, indicated that both current and former council officials were subletting these properties in foreign currency while paying minimal fees to the municipality. Furthermore, the Harare Quarry company has reportedly not remitted any revenue to the city, raising suspicions of collusion between company bosses and council officials.
The Commission of Inquiry into the affairs of Harare recently heard that top council officials were earning hefty salaries and allowances with some pocketing up to US$30 000 monthly.
Amid all the chaos the local authority has maintained an opaque financial system, with the last audit conducted in 2020, exacerbating concerns about governance and accountability in Harare.
