Salary freeze for parastatal bosses

Government has frozen salary increases for public enterprise bosses, most of whom have been earning mega salaries at the expense of service delivery. The freeze also covers additional benefits.

Prices and fees charged by public enterprises such as electricity, rates and water have also been frozen, with any reviews considered on merit. Salaries and prices charged by utilities for water and electricity have been identified as major cost drivers in production. Finance and Economic Development Minister Patrick Chinamasa announced the measures on Thursday.

Presenting his 2017 National Budget proposals, Minister Chinamasa said the Office of the President and Cabinet was now coordinating work in the development of a consistent remuneration framework for boards and executive management of State enterprises, local authorities and other public entities.

He said the current remuneration formats, inclusive of salaries, allowances and other perks, bore no relationship to performance. He announced a freeze of reviews of all remuneration and benefits of bosses at these entities with effect from January 1, 2017 pending finalisation of a new Public Sector Remuneration Framework.

"Once the proposed frameworks have been approved, the Office of the President and Cabinet, and the State Enterprises Restructuring Agency will assume the monitoring and evaluation role to ensure effective implementation."

On the performance of public enterprises, Minister Chinamasa said where Cabinet had made specific decisions on the restructuring of a parastatal or a public enterprise, all responsible line ministries would be required to develop implementation plans.

The implementation plans should include specific targets, while implementation would be monitored by the Office of the President and Cabinet. Minister Chinamasa also announced that prices and fees charged by public enterprises, including electricity, rates and water had been frozen.

He said the move was necessary to allow for economic recovery and to complement other initiatives that Government had put in place to improve production and productivity. These include the Statutory Instrument 64 of 2016, which restricts imports of goods that can be locally manufactured and the introduction of bond notes to improve cash supply.

Since the introduction of SI64, some companies are now operating at full capacity while the general performance of the industry has improved.