Mugabe caps Zimbabwe's 'fat cat' state salaries

Someone holding South African rand and US dollars in Zimbabwe's capital, Harare Zimbabwe's economy is fragile and it does not have its own currency

President Robert Mugabe has moved to ease public anger in Zimbabwe by capping the pay of "fat cat" managers of state-owned companies.

The 90-year-old had faced growing pressure to act after it was revealed that many executives were being paid up to $500,000 (£300,000) a month.

His government is to cap the pay of the bosses of parastatals to a maximum of $72,000 a year, including benefits.

The average monthly wage for government employees in Zimbabwe is $370 a month.

'Salarygate'

"In the public eye, these exorbitant salaries and allowances are not only corrupt but also obscene," Finance Minister Patrick Chinamasa said.

"The public's outrage is justified."

Mr Chinamasa published a list of the salaries paid by all 180 state-owned firms and councils, which he said showed many "fat cat" executives were evading tax by taking lower basic pay then supplementing it with exorbitant benefits that were not taxed.

Patrick Chinamasa in 2013 The finance minister made the announcement after a cabinet meeting

The BBC's Brian Hungwe in the capital, Harare, says the scandal, dubbed "salarygate", broke at the end of last year.

It was revealed that the head of the struggling Zimbabwe Broadcasting Corporation (ZBC) was taking home a $37,050 a month, yet the state-controlled broadcaster had failed to pay its workers for more than six months last year.

Other cases came to light - one health insurance company that covers government employees was paying its chief executive a monthly salary of $230,000 while also giving him monthly benefit payments of $305,499.

Our reporter says MPs from all parties have been outraged by the scandal and parliament has already set up a team to probe the issue.

The government said it intends to recover money that was used to pay salaries that were unjustified but many questions remain over the investigation.

James Maridadi, an opposition MP with the Movement for Democratic Change, accused several government officials of being linked to the scandal and said this was "just the beginning".

Zimbabwe has recovered from hyperinflation and its economic free-fall of several years ago, but its economy is still fragile and it does not have its own currency - it uses eight others as legal tender.

The country is widely seen as one of the most corrupt countries in the world, with Transparency International's latest corruption perceptions index ranking it at 157 out of 177 countries.

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