HARARE, March 19– The Zimbabwe government has set a ceiling of 6,000 US dollars for the monthly salary and allowance for chief executive officers in parastatals and state-owned enterprises (SOEs), says Finance and Economic Development Minister Patrick Chinamasa.

He told journalists here Tuesday that setting a cap on maximum salaries was an interim measure pending findings of audits to be carried out by the Auditor and Comptroller General at these entities.

“Accordingly and with immediate effect, the Cabinet has decided, as an interim measure, that no Chief Executive Officer of any state enterprise, parastatal or local authority should receive a total pay package (basic salary plus benefits) which is above 6,000 USD per month for those on Job Level 1 (the highest grade),” he added.

The CEOs have been categorised into job levels starting from 1 to 6 depending on set common factors which measure know-how, problem solving and accountability. Those in level 1 are expected to be holding jobs which are more demanding in terms of these factors and therefore should be paid commensurate with the appropriate level.

“Accordingly therefore, salaries should be immediately cascaded downwards in each organization. However, the lowest paid employee should not fall below the poverty datum line,” he said.

Chinamasa said the interim salary caps would be in force until audits had been carried out at all institutions.

“Clearly on the basis of these figures, this is outrageous. We cannot allow this to go a day longer,” he said in reference to the extremely high salaries enjoyed by some of the top executives at the parastatals.

The government took the measure to assure the public that it was committed to dealing with the widespread cases of abuse of remuneration processes in the public sector, Chinamasa said.

He added that parastatals used to contribute 42 per cent to the country’s gross domestic product (GDP) but this had stopped because executives were awarding themselves hefty packages while under-performing.

He said the Cabinet would also investigate fees paid to members of parastatal and municipal boards.
He added that local government boards would now determine salaries and allowances for municipal heads who he accused of increasing charges to pay unjustifiably high salaries and outrageous benefits.

He said parastatal and municipal executives were awarding themselves more on allowances, raising suspicion that they wanted to evade taxation. “Giving more benefits than salaries was a trick to run away from taxation. I suspect cases of tax evasion,” he said.

Chinamasa cited the example of the Agricultural and Rural Development Authority (ARDA) chief executive officer who was earning a basic monthly salary of 1,526 USD but enjoyed benefits totalling 12,690 USD, taking home 14,216 USD per month.

He said from now onwards, the remuneration for CEOs of State Enterprises and Heads of Local Authorities should be based on performance of the economy, capacity of the organization to pay and the need to comply with the requirement that the entity’s total employment costs should constitute not more than 30 per cent of budgeted expenditure.

According to schedules submitted to the Cabinet by parastatals, the highest paid chief executive was at Premier Service Medical Aid Society (PSMAS) who earned 535,449 USD per month, followed by the CEOs of mobile operator NETONE with 43,693 USD and Zimbabwe Broadcasting Corporation at 37,050 USD.

The PSMAS and ZBC bosses have since been suspended following revelations that they were earning outrageous monthly packages.


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