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Mimosa Mining Company is the country’s second largest platinum miner. With revenues of up to $270 million per annum, the company is rich in cash.

But a fall in revenue triggered by an almost 50 percent decline in the price of platinum on the world market forced the giant to implement a radical cash containment strategy that included a substantial cut in workers’ salaries this month.

Econet Wireless is Zimbabwe’s biggest mobile communication company, generating $323 million in the six months leading to August last year. But a difficult economic environment has forced the company to take similarly drastic measures. The giant called on its suppliers to reduce their prices, a probable first for our economy. In addition to that, Econet cut workers’ salaries by 35 percent in June last year.

Tongaat Hulett is one of the biggest agro-processing companies in Sadc and Zimbabwe’s biggest sugarcane miller. But the prevailing drought in the region recently compelled the company to cut salaries, according to reports in South Africa.

Amid the prevailing difficult economic environment, many other local companies have resorted to cutting workers’ salaries as a way to not only reduce costs, but to actually survive. Other innovative measures include multi-tasking as well as companies stopping contributing to workers’ pensions, medical aid and so on. Workers generally understand the impact of the challenging environment on their employers’ viability and have agreed, though naturally reluctantly, to having their contracts varied, accepting the wage cuts.

Bulawayo City Council generated $6,1 million in February after collecting $5,2 million the previous month, according to a front page story published in our sister paper Sunday News yesterday. This is by no means all the money council should have raised in that month, but because the economy is causing residents and ratepayers to default, the local authority ended up raising those amounts. If it maintains that revenue collection performance, council will raise $73 million this year, a measly sum compared to Mimosa’s $270 million annual revenue and Econet’s $323 over six months.

After raising $6,1 million in February, council splurged $2,9 million of that, almost 50 percent, on workers’ salaries and allowances. Of the $5,2 million collected in January, $2,2 million went to staff costs.

The government has always called on local authorities to reduce wage costs to 30 percent of revenue, with 70 percent going to service delivery. But Bulawayo City Council is in clear defiance to that directive.

We don’t know how sacrosanct their workers’ contracts are and how service delivery is so cheap.

We are unhappy with that situation as the Minister of Local Government, Public Works and National Housing, Saviour Kasukuwere reasonably is too.

“The reason that ratio was put in place is that we ensure that councillors direct most of their revenue towards service delivery. If you find a local authority directing a huge chunk of their revenue towards their perks then there is a problem which we will not sit back and watch,” said Minister Kasukuwere.

We demand that council be responsive to the operating conditions and lives within its means. To be able to live within its means, means that council’s expenditure must be in tune with its revenues, the same principle that has influenced other employers to adopt cost containment strategies.

Council can protest that they are not like profit-driven Mimosa, Econet and Tongaat Hulett but they must understand, first, that we are going through a difficult economic phase that demands robust decisions. Second, we have a corporate governance framework that enjoins council to judicious utilisation of resources. Third, there is a government directive for all councils to reduce their salary bills to a prescribed level.

We view this as a bad culture in some of our councils and other quasi-government institutions of continuing to pay themselves unsustainable salaries while service delivery collapses.

Bulawayo City Council has just engaged a consultant to conduct a job evaluation exercise until July. Workers fear that the consultant might recommend retrenchment of some of them. With council already understaffed — 3,584 employees to an establishment of 5,070 — we are unsure if retrenchment would be considered. However, we contend that there are other measures, such as we have highlighted earlier plus more that we can’t discuss in this space, and not necessarily shedding staff, that can be implemented to effectively align costs to revenues. The corporate sector is doing that and the government itself is also showing that it is possible to reduce costs without retrenching.

We recognise that council is owed $100 million. This cripples its capacity to deliver service. We continue to call on residents and ratepayers to play their role by paying up.