US$600M lost to salarygate fat cats | The Herald

via US$600m lost to salarygate fat cats | The Herald April 11, 2014 by Felex Share

Jonathan Moyo addresses the inaugural Zimbabwe Accountants Conference while Dr Wesley Sibanda of the Institute of Certified Accountants (Zimbabwe) looks on

Executives in State-linked firms gobbled US$600 million in salaries and allowances since 2009 and US$133 million last year alone.

The money was pocketed by 3 000 individuals who sat on boards or were chief executives and senior managers of the country’s 78 parastatals and State enterprises.
Information, Media and Broadcasting Services Minister Professor Jonathan Moyo yesterday said as such, Government was turning the recently adopted policy framework on parastatals and State enterprises into an Act of Parliament to legally punish officials who deviate from good corporate governance.

The Corporate Governance and Remuneration Policy Framework was established to monitor operations of parastatals and local authorities as well as curb corruption and awarding of unrealistic packages in the public sector.

Prof Moyo, who was addressing the inaugural Zimbabwe Accountants Conference in Harare yesterday, said: “The numbers are revealing and staggering. The total 2013 wage bill for senior management and boards was approximately US$133 million.

“The beneficiaries of this bounty are a paltry 3 000 individuals spending as much as 3,5 percent of Government expenditure to the detriment of some 13 million Zimbabweans who have a right to expect the Government to support them.”

Added Prof Moyo: “Had these salaries been capped at US$6 000 per month and board allowances fees at US$10 000 per annum since 2009 we would have lowered the wage bills of chief executives, board members and senior management to US$78 million, which would have translated to a US$55 million annual reduction in the current wage bill. This would have saved the country about US$220 million and it would have amounted to 5,7 percent of 2013 Government expenditure.”

Prof Moyo said salary disparities between executives and civil servants, who earn a minimum of US$375 monthly, had constrained labour productivity by eroding individual self-motivation.
“The wide income gap may be an important explanatory factor why the ongoing economic recovery does not feel like a recovery at all to many ordinary Zimbabweans. The recovery is truly underway and is beginning to show positive results,” he said.

He said the Cabinet Committee on State Enterprises and Parastatals Development, chaired by Finance Minister Patrick Chinamasa, was turning the policy framework into law.
“It turns out that the response so far by the affected communities of these officials have been negative and even contemptuous because there are no legal consequences for deviating from the framework,” Prof Moyo said.

“It is necessary we go a step further and legislate this framework so that there are clear legal parameters and legal penalties in the event of non-compliance. The matter is live to the committee and this is something we have to do to inspire confidence in the public and also to send a clear message to parastatals and State enterprises that this is not a joke. Some of them are taking it as a joke. It is a serious matter that should find legal expression.”

Prof Moyo said the claim that there would be skills flight if packages were capped at US$6 000 monthly was “self-indulgent”.
“What skill in God’s name will be lost, if Cuthbert Dube leaves PSMAS, as he has hopefully done, to concentrate on doomed Zifa affairs? One comparative advantage that Zimbabwe has is the existence of a critical core of professional skills possessed by young people in the country and the Diaspora who are ready to take their professional places but who are currently frustrated by the lack of opportunities.”

He said political will was needed to fight corruption as there had been notable and worrying political attempts to derail the fight against corruption.
“This was under the cover of political excuses designed to create confusion by giving the false impression that individuals who have been fingered in corrupt acts are victims of some political intrigues and machinations of their real or perceived rivals,” he said.

Accountants and auditors, Prof Moyo said, were important to fighting corruption in the public and private sectors.
“Every corrupt transaction has two parties to it: a politician or Government official on one side, and a businessperson from the private sector on the other side that offers or accepts a bribe,” he said. “Most of this corruption, which has not yet been given as much media attention as the corrupt salaries and allowances takes place in and through the procurement process.”

He said corruption had increased the cost of offshore and inshore money to Government and the private sector because it negatively contributed to the country’s sovereign risk.

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4 comments on “US$600M lost to salarygate fat cats | The Herald
  1. just saying says:

    All well & good but lets see some action and not just targeting of the smaller fish. Confidence in Government is probably at it’s lowest ebb for years but the question remains whether they have the courage to do the right thing. It’s been 3 months already plus Minister Moyo has the figures so what are we waiting for? Did they pay income tax on these astronomical earnings, is what I want to know!!

  2. Zim Patriot says:

    Can Prof Moyo also explain his discrepancies @ Ford foundation Kenya and Wits university in SA, can he also show us how the economy is improving as he claims….valid expose on salarygate though….No to greed and Yes to equality for all Zimbabweans of all races!!!!!!!

  3. Charles Chamunorwa says:

    You can make as many laws you can but Zanu pf will never arrest one of its on. Never-ever

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