President Robert Mugabe‘s government has slashed pay and perks for managers of Zimbabwe‘s state-owned firms, in a bid to ease public anger over “fat cat” executive salaries, the country’s finance minister said on Wednesday.
That would be a huge cut for some executives, who were raking in up to half a million a year. Newspaper accounts of their pay had sparked outrage in cash-strapped and deeply impoverished Zimbabwe, where the average government employee makes $370 a month.
“In the public eye, these exorbitant salaries and allowances are not only corrupt but also obscene,” Chinamasa said in a statement. “The public’s outrage is justified.”
A list of salaries of all 180 state-owned firms and city and town councils provided by Chinamasa showed many managers were evading tax by taking lower basic pay but exorbitant benefits, which were not taxed.
A health insurer that covers government employees was paying its chief executive a basic monthly salary of $230,000 and monthly benefits of $305,499. The chairman of a border town in western Zimbabwe got a basic salary of $1,100 a month but about $16,000 a month in benefits, which were not taxed.
Mugabe’s ruling ZANU-PF and the opposition Movement for Democratic Change have been calling for the worst offenders to be dismissed and arrested for abusing public funds, in a rare show of political unity.
However, Zimbabwe is ranked as one of the most corrupt countries in the world. Local media reports routinely report that state-owned companies are plagued by corruption, including flouting tender procedures to hand contracts to related parties. There are fears that managers will top up their pay with graft.