Zimbabwe caps salaries for "fat cat" state executives

HARARE Wed Mar 19, 2014 4:30am EDT

Zimbabwean President Robert Mugabe and his wife Grace wave to supporters and guests during celebrations to mark his 90th birthday in Marondera about 80km (50 miles) east of the capital Harare, February 23, 2014. REUTERS/Philimon Bulawayo

Zimbabwean President Robert Mugabe and his wife Grace wave to supporters and guests during celebrations to mark his 90th birthday in Marondera about 80km (50 miles) east of the capital Harare, February 23, 2014.

Credit: Reuters/Philimon Bulawayo

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HARARE (Reuters) - 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.

Finance Minister Patrick Chinamasa said Mugabe's cabinet on Tuesday agreed to cap the salary and perks for managers of government-owned entities and city council bosses at a total of $72,000 a year.

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.

(Reporting by MacDonald Dzirutwe; editing by David Dolan, Larry King)

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