Solomon Huruva (MPH)                   


The year 2014 is one many Zimbabweans will not forget easily. The year started on a high note of expectations particularly for civil servants who were eagerly awaiting fulfilment of promises made before elections. This was going to be the first year they were going to get a salary increment since the introduction of the multi-currency system in 2009. In what seemed like a flash, the media was awash with cases of graft, abuse of public office by the most trusted of public servants. Revelations are showing that this is widespread. The scandal is now broadly termed “salary-gate”.

What shocked most civil servants was the “salary-gate” in the health insurance sector. According to the Herald, the top six executives of the biggest health insurance organisation PSMAS (Premier Service Medical Aid Society), were getting $1.1 million in basic salaries per month. The chief executive alone was taking home more than half a million US dollars a month. This is in the context where the majority of its members, civil servants (including those who retired), constitute more than 75% of membership. These members barely earn more than $400 per month and pensioners, widows who need medical care earn a good deal less.

PSMAS also owes service providers $38 million in unpaid fees. This scenario exposed the insured to high Out Of Pocket payments (OOPs) since many service providers were now demanding cash payments from those insured by PSMAS.

What are some of the possible causes of this scandal? Let us explore some options.



Since 2003, PSMAS is the second biggest provider of health services in Zimbabwe after the government, through its subsidiary Premier Service Medical Investments (PSMI). It has also been the biggest employer of doctors in Zimbabwe from 2012 on and contributed to internal brain drain and mal-distribution of this scarce resource. A problematic situation as it was both fund manager and provider of services. Reforms have long called for a provider-purchaser split particularly in the health sector; in this case, no one heeded that call. In 2010, long before the current crisis, stakeholders through theTraining and Research Support Centre (TARSC) platform called for enforcement of the law. The lack of capacity within the Ministry of Health (MOH) is one of the reasons behind the inability to enforce and regulate the sector.There was an inherent moral duty as a fund manager to provide services to clients, most of whom were its members (who did so to avoid paying OOP payments).

As a quasi-public sector enterprise, PSMAS fell under four ministries, respectively the Ministries of Finance, Health, Labour and the Public Service Commission. Although this makes sense, this made it rather difficult for anyone of them to ensure effective oversight and regulation of the organisation. The Ministry of Finance is the treasury of central government; the Ministry of Health should play the key oversight role, as it is responsible for regulation of the health sector, whereas the Labour and Public Service Commission are responsible for all workers in Zimbabwe and civil servants respectively. In reality, there was no effective ministerial or political control. This governance crisis could have led to the situation going unchecked for some time.

As mentioned, the MOH should have played a very critical stewardship and regulatory role because the main functions of PSMAS were health insurance & health services. However, the MOH failed to do so, and to make matters worse, MOH was the only ministry that did not have a representative on the governance boards of PSMAS. None of the four ministries has taken blame for what has transpired. In addition, MOH’s regulatory oversight role is post hoc i.e. it only approves or addresses issues after implementation and in many cases months later. The MOH therefore does not have meaningful blocking power to prevent ‘bad boy’ behaviour.

The CEO of PSMAS was also chair of 20 public companies in the country and within the region. Was he smart enough to sit on all those boards? Did we not have enough talent to go round?


Political motivations

In as much as this has been happening from around 2009, why expose this information now? One school of thought is this may be a political game.

After winning the July 31 2013 elections, the ZANU PF party (Mugabe’s party) wants to sanitise its image by ‘ seemingly being seen to fight corruption ‘. Most importantly regional groupings like the EU are considering lifting sanctions on Zimbabwe and this is a critical trade-off for the establishment. Corruption and rule of law had been high on the agenda as destructive vices that need attention if Zimbabwe had to entertain reengagement onto the international arena.

Closer to home the salary-gate could be a potential diversion from the pressing demands of restive civil servants who have been eagerly awaiting a salary increment.


A predatory, extractive type of institution?

Another school of thought focuses on the institutional arrangements within these health insurers. They are relics of our colonial past, and were created to extract resources from the people and have not transformed with the times, hence we should not expect less! Patients pay up to 70% in OOP expenditure and yet they are”insured”. In our National Health Accounts 2010 (still to be published), evidence showed that 58% of subscriptions by members went to transaction and administrative costs of running the health insurance firms.


Do we expect anything to change? Probably not; although we are a polarised nation, very few will take this opportunity and run with it. Nevertheless, maybe this is a good opportunity to reform the health insurance industry and have an alliance between health service providers and the insured to push for radical reforms. The key question is: can we make our leadership more accountable and responsible? Revelations from those well read show that this very CEO was earning three times more than a CEO of a global company whose GDP is ten times more than that of Zimbabwe. I do not want to make this a criminal case, but a moral one with the hope of invoking checks and balances. The biggest weakness in my opinion is that we did not have adequate checks and balances in place. Anyone in this position could have abused the system in seeking to satisfy his or her need.

The state institutions are to blame, since they did not protect the members from the predatory behaviour of public enterprises. The vulnerable expect the state to protect them, in the hope that the state has adequate technical competencies to oversee and regulate the market

This is Zimbabwe, very little is done unless it is ordered from the top! The truth is we need a more accountable system, one that is responsive to the needs to poor, vulnerable communities of Zimbabwe.

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