The development is likely to see bosses at utilities such as the Zimbabwe Electricity Supply Authority (Zesa), Zimbabwe National Water Authority (Zinwa) and mobile phone company, TelOne taking huge pay cuts as their perks did not match the revenues they generated as well as services they offered.
The parastatals, most of them who had been run-down by boards sympathetic to Zanu (PF) would have to submit salaries to their line ministries and the Ministry of State Enterprises and Parastatals for approval.
Gorden Moyo, the newly appointed Minister of State Enterprises and Parastatals confirmed the directive, which he said was approved by cabinet on Tuesday.
Without giving examples, Moyo said a recent audit found out that several loss making state enterprises were paying their top management super salaries yet they were falling shot on service delivery.
“Any institution with salaries not approved by its line ministry should regularise and rationalise them as soon as possible,” Moyo said.
“The salary proposals should be taken to the line ministries for approval in consultation with my ministry.”
He said government had also realised that some parastatals had not held annual general meetings or produced audited results for a long time.
Moyo said all the companies caught on the wrong side of the law would face severe sanctions.
Government will also move in to appoint new boards in cases where companies had gone for years without proper structures.
The former Minister of State Enterprises and Parastatals Joel Gebbuza early this year launched an investigation into the salary levels at state owned companies following complaints that they gobbled money meant for service delivery.
A number of enterprises resisted the audit and the government may not know the extent of the rot in the sector.