Mishma Chakanyuka, Staff Writer 
THE Central Mechanical and Equipment Department (CMED) says it plans to introduce interest rates for clients who delay payments starting next year.
This comes as the state enterprise has faced financial difficulties due to delayed payments from government ministries and departments.
“To mitigate against that, we will be asking for shareholder consent to reciprocate what we are getting from ZIMRA by initiating interest components as per the Reserve Bank of Zimbabwe overnight rates for our clients,” said CMED managing director, Davison Mhaka.
“We have decided to charge interest on those clients that are not paying on time, so that we can hedge against other costs incurred.”
Mhaka expressed hopes that charging interest rates would prompt government ministries to act more swiftly on payments.
“I think this will also push them to seek payment on our behalf from the relevant ministries because it seems we are doing most of the running to the Ministry of Finance while those whom we provide service to will be relaxing in their offices. For them to take note of the challenges we are facing, we will start implementing overnight interest rate charges beginning in 2025.”
Mhaka explained that payment delays by the department’s main clients have resulted in the company falling behind on its tax obligations, resulting in account garnishments.
“You know it is a requirement for companies to pay value-added tax (VAT) to ZIMRA once you raise an invoice. You have to pay within 30 days,” he said.
“The delay in liquidating these debts from our main client is affecting us. Currently, we owe ZIMRA about ZiG8,1 million, including a US$322 000 component.”
In response to these challenges, CMED has appealed to ZIMRA to switch to a cash payment plan, arguing that the repeated garnishment of its accounts is disrupting business operations.
Deputy Transport minister Joshua Sacco acknowledged the payment delays and said discussions are underway to resolve the issue.
“The ministry of Transport and Infrastructure Development has an ongoing relationship with CMED, and yes, payments have been delayed in some cases,” Sacco noted.
“We are operating on a cash basis, relying on revenue from taxpayers. There are no external lines of credit; all infrastructure projects in this country are being funded by the fiscus.”
Sacco further stressed the urgency of the situation, saying, “The ministry is aware of the urgency, and talks are being held with the ministry of Finance to expedite payments.”
