Salary cap: A con that fools no one

via Salary cap: A con that fools no one 20/03/2014 by Nkosana Dlamini NewZimbabwe

FINANCE Minister Patrick Chinamasa on Tuesday announced a drastic slash of salaries for CEOs running State entities and local authority top administrators from the hefty amounts running into tens, in some cases, hundreds of thousands, to a blanket $6 000. The minister maintains the ambush mega-salary slash is a temporary measure that would culminate in government’s invention of policies aimed at sanitising the obnoxious wage regime for corporate elites going into the future.

Chinamasa also speaks well by stating that the salaries have no correlation with the general performance of the loss-making entities and the entire economy at large. He also puts it concisely when he says there is now a surge in the cost of services offered by these entities which is driven by the need to meet their steep employment costs. At face value, the sanitisation of these salaries is a long overdue intervention by government to heal a cancer that has long held the entire economy to ransom given the strategic nature of the State firms whose services also affect the operations of private entities.

But what has escaped Chinamasa is that the solutions lie further than just dealing with a bunch of greedy individuals plundering the entities they are entrusted to run on behalf of all Zimbabweans. Somebody drew the analogue of one trying to deal with an “elephant of rot” by simply chopping off the tusk while leaving the whole anatomy to live and flourish. Through his “rob-the-robber” approach, Chinamasa could well be mimicking this fallacy, for as long as he continues to chart this narrow path which seeks to confine the problems affecting State entities to the delinquent acts of company bosses.

For crying out loud, the salary scandal is a microcosm of a whole corporate governance malfunction that would require the overhaul of the entire system by a whole government. Moreso, it is intricately linked to a patronage system which President Robert Mugabe himself has painstakingly presided over for years. At a panel discussion in Mutare recently, former Parastatals and State enterprises minister Gorden Moyo put it plainly when he accused Mugabe of commandeering public resources under the authority of these entities to prop up military operations.

The country’s military has been a large piece in Mugabe’s power retention jigsaw, to a point where he has rewarded retired army chefs with influential positions in State entities. This he does apparently to keep them within eye-shot, lest their idle military brains merge and morph into a viable opposition force against his rule. Zanu PF has also been in the business of hijacking resources from these entities to boost its election campaigns. A case in point is when they use DDF vehicles or ZUPCO buses to ferry supporters to Zanu PF rallies, or grabbing grain from the GMB for distribution at these partisan gatherings.

The State has also watched while some war veterans have illegally connected ZESA power cables to their farms to draw electricity for free. During the unity government era, then Energy Minister, Elton Mangoma of MDC, also raised alarm on the huge debts owed to the power utility by Zanu PF chefs but he was threatened and all is now history. From a corporate governance perspective, one can be reminded of the President commandeering a whole Air Zimbabwe plane via an Asian route or twisting the lenses of ZBC cameras to focus on a whole birthday bash or wedding, believably, for nothing. At the end the day, the State, or Zanu PF to be precise, has become the de facto board of these entities.

Chinamasa can as well tell us how he intends to deal with his Cabinet colleagues who have plundered the State entities in different ways. The rot bedevilling State entities is also intertwined with the tendering system where services and goods are inflated by top managers under the nose of boards which are in turn pampered to keep quiet. But when all said and done, the capping of wages by a powerful minister is a knee-jack reaction to a larger problem and fits well into what has now become the Zanu PF narrative of making revolutionary approaches to problems that need sober minds.

In this, one is quickly reminded of the disastrous price slash of 2007 which left shop shelves empty as well as the company and land grabs under the guise of the redistributing wealth. To date, no evidence has been proffered to suggest that these have been the right decisions. Most saddening though is the fact that Zanu PF, with all its sophisticated minds that can steal an election under everyone’s nose, has not learnt that its disastrous reactions to deep seated national problems have grave consequences for the whole country.