Lifestyle audits: Fat cats must also come under scrutiny

THERE is a sense of déjà vu about government’s announcement last week’s that it would be subjecting board members and senior managers at parastatals and state-owned enterprises (SOEs) to periodic lifestyle audits.

Herbert Moyo

The feeling is that of having travelled down the same road of announcements and promises, which ultimately fail to yield the hoped-for results of stamping out endemic corruption.

According to the state media, the Zanu PF government will use its overwhelming numbers in parliament to fast-track the Public Sector Corporate Governance Bill which seeks among other things to compel board members and managers to “declare their assets upon appointment and, thereafter, periodically”.

“Investigations will be opened if there are mismatches between declarations and actual assets, or between income and assets accumulated during one’s tenure and those found with suspiciously burgeoning asset bases will be investigated and possibly prosecuted,” one report said.

Ostensibly, the Bill and the promise of action are welcome given the country’s long history of poor corporate governance and economic mismanagement which culminated in Transparency International (TI) ranking Zimbabwe 156th out of 175 highly corrupt countries in the 2014 Global Corruption Perception Index.

In Southern Africa, Zimbabwe was ranked the second most corrupt country in the region after Angola which came 161st. TI said poor scores were, among other factors, likely a sign of widespread bribery and lack of punishment for corruption — certainly this rings true to Zimbabweans who perceive political bigwigs and the well-connected to be above the law.

Zimbabwe has a well-documented history of crafting well-intentioned policy documents, including Zanu PF’s leadership code of 1984 (which banned party members from owning businesses and property), and more recently the Corporate Governance Framework launched during the tenure of the unity government comprising Zanu PF and the MDC formations from 2009 to 2013.

“Party officials shall not own a business, a share or an interest in a business organised for profit; provided that this shall not be interpreted as prohibiting such petty sideline activities as chicken runs, small plots and gardens on one’s residential property,” reads part of the Zanu PF code of the heady years of Independence when socialism was still en vogue.

Other prohibitions in the code included receiving more than one salary and owning more than 50 acres of land.

Like all these well-meaning documents, there are fears the Public Sector Corporate Governance Bill — even if passed into law — will go the same route of irrelevance in the absence of the necessary political will to implement it.

According to constitutional law expert Alex Magaisa, “Zimbabwe does not have a shortage of laws to curb reckless, fraudulent and corrupt behaviour. What is lacking is the will to enforce these rules and mechanisms. Corruption is endemic because it starts from the top and it is a tool of control by the leadership.

“Corruption is used to ensure that subordinates are kept on the leash. These laws are only useful if there is an efficient enforcement mechanism and this needs strong political will which is lacking in Zimbabwe.”

Back in 2012, then state enterprises and parastatals minister Gorden Moyo presented a damning report to cabinet detailing how parastatals continued to perform dismally with the majority making losses amounting to millions of American dollars.

Of particular interest was the National Railways of Zimbabwe (NRZ) which was said to require over US$2 billion at the time to resuscitate operations.

Not only had it recorded a loss before tax of over US$60 million with low capacity utilisation, high overheads and operational inefficiencies, its workers went unpaid for more than six months while management, led by the late Retired Air Commodore Mike Karakadzai, continued to receive their salaries and allowances.

Needless to say, Mugabe rewarded Karakadzai with national hero status when he died in 2013 and promised to continue deploying to parastatals people like him because “men and women with the correct political ideology and military prowess such as Comrade Karakadzai formed the backbone of our defence forces at Independence”.

Meanwhile, workers are yet to receive their salaries and most of the trains no longer operate as the NRZ continues on its downward spiral.

Other parastatals such as state broadcaster ZBC and the Public Service Medical Aid Society (Psmas) subsequently hit the headlines for paying former chief executive officers Happison Muchechetere and Cuthbert Dube “obscene” salaries while ordinary workers went months without pay. Psmas CEO Dube was getting a basic salary of US$230 000 per month, but over US$500 000, including benefits. On the other hand, Muchechetere was raking in about US$40 000 per month, excluding fuel and other benefits, while workers at the insolvent broadcaster were unpaid for seven months.

Given this grim background, political analyst and social commentator Takura Zhangazha cautiously welcomed the Bill saying “it makes sense within the context of recent allegations and some convictions for fraud by heads of parastatals”.

He however said senior government officials were often complicit in parastatal corruption and corrupt themselves, hence a more holistic approach would require that “such rules (lifestyle audits) apply to political leaders in government who must declare their assets, and not just civil servants”.

For analyst Dumisani Nkomo parastatal heads are merely the small fish.

“There should be a real attempt to audit the lifestyles of the big fish not just small fish who head parastatals. They (audits) should be carried right up to the top to include ministers and legislators. How do you explain individual ministers having more money than government ministries and doling out cash for various projects; where do they get the money from?” asked Nkomo.

There have been revelations of the fabulous riches enjoyed by senior government and party officials like Local Government minister Ignatius Chombo and Phillip Chiyangwa. As things stand, the two will remain outside scrutiny as the Bill relates only to parastatal officials.

Chombo’s riches became a talking point during divorce proceedings with his former wife Marian back in 2012. Much of it was accumulated after he became a government minister in the 1990s; before that he was a lecturer at the University of Zimbabwe.

The couple finally decided on an out-of-court settlement to avoid further revelations of their vast wealth, but not before the public had learnt he owns stands and residential properties in most urban centres as well as many cars and farms.

Chiyangwa’s case was eventually resolved amicably but after court documents suggested the politician has over 100 immovable assets worth over US$270 million. The properties’ values range between US$200 000 and US$75 million.

These few cases amply demonstrate the need to extend lifestyle audits beyond mere parastatal heads. In addition, audits cannot eliminate corruption by themselves — what is more critical is the will to prosecute those implicated in corruption no matter how powerful they are.

Given Zanu PF’s majority in parliament, it appears certain the Public Sector Corporate Governance Bill will be passed into law, joining other policy documents and laws which have however failed to stem corruption.

A TI survey released this week revealed most Zimbabweans believe corruption has worsened over the last two years as the economic crisis continues, with the police ominously topping the list of most corrupt organisations.

Instructively, the Auditor and Comptroller-General has over the years produced annual reports repeatedly exposing the shocking rot in parastatals and government ministries, but the key element that has been missing is action against the culprits and without it the new regulations will ultimately be rendered irrelevant.