PARASTATALS and local authorities continue to defy President Robert Mugabe’s directive on exorbitant remuneration for their executives by refusing to slash astronomical salaries and allowances — widely deemed “obscene” — showing his control is now shaky.
In March last year, government imposed a salary cap of US$6 000 for top earners in parastatals and local authorities after it emerged that quasi-government entities were paying senior employees mega-salaries despite failing to meet their national mandates while workers went for months or even years without pay .
Most parastatals are technically insolvent and a perennial drain on the struggling fiscus due to mismanagement, poor corporate governance and corruption, among other vices.
Despite government’s directive, state enterprises and municipal executives have continued to draw huge salaries in what could be viewed as evidence that Mugabe has lost his grip on power as his word is no longer law.
Presenting his state of the nation address in parliament on Tuesday, Mugabe confirmed most state enterprises had ignored his directive although he said government would continue to push for good corporate governance to be observed, efforts which have met little success in the past.
“In the interim, however, and as an important parallel process, government has also turned the spotlight on corporate governance throughout the public sector on, including across all parastatals, state enterprises and local authorities. It is very clear that, over many years and due to a variety of reasons, the level of compliance with corporate governance principles at many, if not most our parastatals, has fallen well below what might be regarded as even minimally acceptable,” Mugabe bemoaned.
“The extravagance of the remuneration packages and associated benefits, which boards and management have blithely awarded themselves, borders on the obscene reflecting avarice and greed, instead of the commitment to serve we expect, indeed demand of those appointed to such strategic positions.”
Official documents listing the perks of 90 parastatal heads and 91 municipal executives showed that executives at parastatals such as Zimbabwe Broadcasting Holdings, NetOne, Marange Resources, Zimbabwe Revenue Authority, Zimbabwe Electricity Supply Authority, Grain Marketing Board, Civil Aviation Authority of Zimbabwe and Allied Timbers, among many others, are still earning way above the salary cap set by government.
The most shocking revelation however was that of Premier Service Medical Aid Society (Psmas) former chief executive officer Cuthbert Dube who was taking home US$535 000 per month, broken down as US$230 000 as a salary and US$305 499 as allowances.
Despite Mugabe’s directive, some state entities are still paying executives more than US$40 000, while the Harare City Council is paying its directors in excess of US$20 000.