By Tichaona Sibanda
SW Radio Africa
19 March 2014
In the wake of complaints that a large number of chief executive officers of parastatals were getting paid astronomical salaries, government has finally acted and announced a $6,000 monthly salary cap.
The cap only affects executives of state-owned entities, following the salary-gate scandal that was triggered by the huge amount of money paid to Happison Muchechetere, the suspended CEO of the Zimbabwe Broadcasting Corporation, who took home $37,000 a month.
Finance minister Patrick Chinamasa told journalists in Harare that no chief executive of any state enterprise, parastatals or local authority should receive a total package which is above $6,000, with immediate effect.
Chinamasa emphasized that those in breach of the directive risk drastic measures against them.The minister explained that investigations instituted after the salary-gate saga revealed that 90 parastatal CEOs were setting themselves low basic pay, and then awarding themselves huge benefits.
For example, the Plumtree local board chief executive officer earns a basic salary of just over $1,000 which balloons to a staggering $17,000 with benefits.
The salary clamp down has been welcomed by many people, who believe the CEO’s were earning huge amounts for nothing as most of the entities under their control were underperforming.
Economic analyst Bekithemba Mhlanga said he also doubts any of the CEO’s will challenge the salary cap because none of the parastatals had been productive and commercially viable for ages.
‘If within the contracts there was a clause that allows government to rescind them because certain aspects have not been fulfilled then there are no legal grounds for affected CEO’s to challenge it.
‘But if some of the obligations have been fulfilled some CEO’s and the contract is silent on that, I might see Chinamasa having a few problems,’ Mhlanga said, adding it would be hard to find one parastatal that has done well in country.
‘Lets take ZBC and Muchechetere as an example. If part of his contract or package was premised on the fact that the corporation is a sound, sustainable, productive and commercially viable enterprise, then it would have been unfair to temper with the salary.
‘But as we know all these things were not happening at ZBC over the years and this gives government a good leg to stand on in cracking down on the salaries of the CEO’s,’ Mhlanga added.
Others believe the cap on the salaries has come too late when the economic situation in the country is on a downward spiral, coupled with ZANU PF’s seeming lack of knowledge on what to do about the situation.
Observers have commented that downgrading salaries will also have the effect of fuelling corruption. No CEO is going to happily accept such a decrease in salary, and will spend his whole time finding ways to corruptly top it up.