1 September 2014

Zimbabwe: Creaming It

Photo: Future Atlas
An anti-corruption billboard in Uganda.

When Zimbabwean President Robert Mugabe was sworn in for a seventh consecutive term in August 2013, he named the fight against corruption as the biggest priority of his new term. Almost a year later a series of exposés related to pay packages in Zimbabwe's loss-making parastatals has embarrassed the 90-year-old leader and his Zimbabwe African National Union-Patriotic Front (Zanu-PF) government.

The scandals, dubbed "Salarygate" in local media, came to light in November last year when The Herald, a state-owned newspaper, began publishing details of executive remuneration at various public institutions.

For years, several parastatals--the Zimbabwe Broadcasting Corporation (ZBC), state medical aid provider Premier Service Medical Aid Society (PSMAS), power utility Zimbabwe Electricity Supply Authority (Zesa) and national airline Air Zimbabwe--have been ravaged by debt and unable to pay workers' salaries, according to government reports. Yet these state-owned enterprises have been awarding enormous salaries and pay packages to their executives.

The publishing of the salary of ZBC chief executive, Happison Muchechetere, in November last year, opened the window into the rot. Mr Muchechetere's $40,000 a month salary was in stark contrast to the lot of the 1,000 workers employed at the ZBC, who at the time of the exposé had gone for six months without pay.

Jonathan Moyo, the information minister, intervened, issuing a 14-day ultimatum to the ZBC board to come up with a turnaround strategy. When the board, led by Cuthbert Dube--also the chief executive of PSMAS--failed to comply with the ultimatum, the minister dissolved it and ordered a forensic audit of the broadcaster.

The auditor-general's report, published last March, established that while ZBC workers went without pay, Mr Muchechetere continued to receive his salary and benefits that included school fees, fuel and entertainment allowances, medical aid and flights to international holiday destinations with family members. The report recommended that the broadcaster cut the pay of senior and middle management as well as retrench almost half the workforce.

Mr Muchechetere's salary was dwarfed by Mr Dube's, who was earning a staggering $535,000, including benefits, every month as chief executive of PSMAS, a position he has held since 1992. Revelations of Mr Dube's salary in the media last December saw hasty manoeuvres within government to force him from the insurer's helm. The government in January dissolved the PSMAS board, which was comprised of high-ranking state bureaucrats and Zanu-PF-linked officials.

Mr Dube is challenging his dismissal at the labour court and is claiming the pay owed to him between January and May this year. "What is clear is that Mr Dube is still employed by both PSMAS and its subsidiaries as there has been no termination of contract," said Jonathan Samkange, his lawyer.

How The Herald had access to the information remains a mystery, but senior Zanu-PF officials, among them Joice Mujuru, the vice-president, have alleged that the exposés were designed to tarnish the images of politicians linked to a Zanu-PF faction sympathetic to her.

"Salarygate", like all else in current Zimbabwean politics, must be seen in the context of the succession battle playing out within the ruling party. Mrs Mujuru is widely thought to lead one of the factions angling to take over from Mr Mugabe. Emmerson Mnangagwa, the justice minister, leads the rival faction.

Publicly both Mrs Mujuru and Mr Mnangagwa have denied leading any faction, which is why Mrs Mujuru's response to "Salarygate" amounted to a rare admission.

Mrs Mujuru chided the media in February for the string of exposés, saying they were fanning factionalism within the party. Then at a heated Politburo meeting of Zanu-PF in June, she blamed Mr Moyo for facilitating the exposés, according to Zanu-PF insiders who asked to remain anonymous. She accused him of having an "ulterior motive", presumably to discredit senior party officials linked to her faction, they said.

Webster Shamu, the former information minister, and Nicholas Goche, the former transport minister--under whose jurisdictions, respectively, the ailing ZBC and Air Zimbabwe fell during the "Salarygate" period--have both been linked to Mrs Mujuru's faction. In a cabinet swap last year, Mr Mugabe appointed Mr Shamu as the new minister of information and communication technology and Mr Goche as the new minister of labour and social welfare.

Money has always been crucial to Zanu-PF's internal politics, with well-heeled figures and groups pushing their interests. The rise of Mrs Mujuru herself was aided by her wealthy late husband and former army commander Solomon "Rex Nhongo" Mujuru. Mr Mujuru owned multiple farms and a diamond mine. He used his wealth to donate to party programmes, while behind the scenes he lobbied party officials to support his wife's political rise.

The ruling party owes its extended survival to patronage politics: state-owned enterprises have frequently been used as an avenue for rent-seeking, Charles Mangongera, an independent political analyst based in Harare, told Africa in Fact. "The chief executives were paid hefty salaries and in return they were funding the party. Control of the parastatals therefore becomes key," he said. "On another level, control of state institutions such as the ZBC is also crucial for the factions as it guarantees them favourable media coverage, which will also be key in the succession battle."

The series of revelations has proved hugely embarrassing for Zanu-PF, which is keen to cast itself as "pro-poor". The mega-salaries have been a central point of discussion in the local press, social media, radio talk shows and discussions on the streets.

While Mr Mugabe does not directly appoint parastatal heads--the prerogative lies with the relevant ministers--the ministers must inform him of their choices. Critics have long argued that the process gives too much power to these bureaucrats and is open to abuse and patronage. Too often, politically connected individuals take charge of parastatals ahead of more capable people.

Since the exposés, public servants' unions have become vocal in denouncing corruption and gross pay discrepancies, with several, including the Zimbabwe Teacher's Association (Zimta), calling for the government to punish the implicated executives.

Public servants' unions managed to exact a 23% raise in April after negotiations with the government that started in December last year. With this increase, the basic minimum wage of a public servant is now $320 a month--a far cry from the $550 the unions were demanding.

In a face-saving move, Patrick Chinamasa, the finance minister, announced in April a monthly salary limit of $6,000 for all parastatal heads. He conceded in June, however, that enforcing the cap would be difficult because contracts had already been signed with the executives and mechanisms to enforce compliance were non-existent. This meant that the administrators could challenge the government in the labour court. "We will proceed on a case-by-case basis and look at international best practice on how to set remuneration targets," Mr Chinamasa said at a press briefing in June.

Police have ruled out making any "Salarygate" arrests until the various ministries governing the parastatals have concluded their forensic audits, according to police spokeswoman Charity Charamba.

One reason Mr Mugabe is yet to deal decisively with corruption in government is that both factions in Zanu-PF are at the feeding trough, said Mary-Jane Ncube, the executive director of Transparency International Zimbabwe. With the party splitting beneath him, Mr Mugabe had "no appetite" for dealing with corruption, she said.

Berlin-based watchdog Transparency International ranked Zimbabwe a dismal 157th out of 177 nations in its 2013 Corruption Perceptions Index.

The excesses have put Zimbabwe's leaders' moral values under the spotlight, said Sifiso Ndlovu, chief executive of Zimta. "How do they [the Zanu-PF elite] justify living in opulence while being surrounded by a sea of poverty?" he asked. "How do ministers who are handlers of these parastatals recorrect [sic] what has been done? It's an entire overhaul of the whole system that is needed."

As long as executives remain politically connected it will be near-impossible to overhaul the system, said Memory Nguwi, a managing consultant with Industrial Psychology Consultants, an independent consultancy firm based in Harare. "The trend locally is that basic salaries have no link to individual performance. Instead top earners are connected either politically within the [Zanu-PF] organisation or have a good relationship with board members," he said.

While Mr Mugabe clings to power and factions within Zanu-PF position themselves to succeed him, using state resources, it seems more foolish than hopeful to expect anyone in the ruling party to improve the performance and condition of the country's beleaguered parastatals.

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