dyton mupawaenda
Trust Freddy-Herald Correspondent
Harare City Council could be losing more than US$70 million a year in uncollected revenue in the absence of a modern enterprise resource planning financial system, according to suspended Harare town clerk Engineer Hosiah Chisango.
He made the startling revelations on Thursday when he appeared before the Commission of Inquiry into the affairs of Harare City Council since 2017, chaired by retired judge Justice Maphios Cheda.
This staggering loss of revenue is estimated to have totalled US$350 million over the past five years, since the council decided to close the city’s then ERP system, from a South African supplier, after the charges went up.
The city has been battling with a financial system designed for small and medium businesses and using many manual systems as well.
The revelations come at a time when residents are contending with poor services such as erratic collection of garbage, bad suburban roads and unpredictable water supply.
An ERP system is a type of software that organisations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.
Said Eng Chisango: “When we look at our budgets, it is in excess of US$500 million per year, and then due to the system not operating well, our revenues are subdued to between 40 percent and 50 percent of what we should be collecting. An estimate would suggest that if I had a very functional system, I would probably collect 75 percent.
“So, the 25 percent shortfall is what I would actually attribute to the absence of (ERP system) and we are probably looking at US$60 million to US$70 million a year.”
Eng Chisango also said the annual total budget for revenue collection for the city hovers around US$120 million a year.
He admitted before the commission that if Harare had an effective ERP system, council would never face refuse collection challenges.
There are reports that council rejected a US$350 000 locally-developed ERP system from the Harare Institute of Technology (HIT) and opted for a multimillion-dollar foreign alternative.
The absence of an ERP system has prompted residents to claim that senior officials at Harare City Council want to continue abusing loopholes that are found in the manual system.
The ERP system developed by HIT, was meant to address critical operational inefficiencies within the city council, including revenue collection and resource management.
However, council opted for a system designed by a foreign company, costing over six times more and the attempt was blocked by the Procurement Regulatory Authority of Zimbabwe (PRAZ).
On Tuesday, HIT tore into Harare City Council’s financial management, describing it as a “recipe for disaster”, citing the glaring absence of a robust ERP system as the primary culprit behind council’s operational chaos, porous revenue collection and staggering financial losses.
Mr Herbert Njonga, the Registrar at HIT and Engineer Tererai Tinashe Maposa, a director and developer at the institute, appeared before the Commission after Justice Cheda requested the institution to shed light on the controversy surrounding the City Council’s alleged rejection of the ERP and its findings about the city’s operations.
In their testimony, the HIT officials cited a series of systemic issues that have plagued the City of Harare’s operations in the absence of an efficient ERP system.
“Where there are no robust control and accountability systems, there is room for abuse,” said Eng Maposa.
“The same system that was rejected locally has received international recognition, having won an intercontinental award and has been invited to Rwanda and the Commonwealth for its innovative design.
“This is a missed opportunity to empower local talent and support Zimbabwe’s technological development.”
It emerged that after rejecting a locally developed US$350 000 ERP system, the City proposed a staggering US$57 million alternative, which was promptly rejected by PRAZ.
The proposed system was over 160 times more expensive than the local ERP system.
In another attempt, the procurement regulators blocked again the council’s push to acquire a US$2,8 million billing system through a condonation process, criticising city bosses for violating laws and exposing public funds to litigation.
However, Government has chipped in, ordering the city last month to immediately reconstitute the ICT steering committee, comprising representatives from both council and the Ministry of Local Government and Public Works to look into the ERP issue and oversee its implementation.
