Mozambique: Country has lost around 120,000 jobs due to pandemic – World Bank

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Mozambique: Country has lost around 120,000 jobs due to pandemic – World Bank

2:23 CAT | 02 Dec 2020

File photo: Lusa

The World Bank estimates that Mozambique has lost 120,000 jobs due to the Covid-19 pandemic, mainly in the hotel and tourism, transport, education and informal sectors.

“We have record of 120,000 job losses, with a greater incidence in the north of the country, which is worth mentioning due to the sensitivity of the region,” the institution’s chief economist in Mozambique, Paulo Correa, said on Tuesday during a conference on “The Regional Economic Outlook for Sub-Saharan Africa” promoted by the International Monetary Fund (IMF).

Correa said however that the flexibility of Mozambican labour law had allowed greater capacity to resist the impact of the Covid-19 in the private sector.

“The impact of Covid-19 for companies and employment, in what can be considered the first wave, was profound, but less devastating [than in other countries] and this was achieved through flexible labour legislation,” he said.

The use of suspension of employment contracts and reduction of wages – ‘the lay-off’ – allowed the safeguarding of many jobs and the survival of companies, Correa stressed.

The priority of the social partners must be the protection of companies and jobs, mainly in the formal area, in the event of a second wave of the new coronavirus in the country.

“The focus on protecting the formal private sector has to do with the characteristics that make recovery difficult,” because it requires new hires and training of personnel “to return to activity”, he added.

Regarding the Mozambican government’s response to the needs of companies vis-à-vis Covid-19, Paulo Correa considered them in line with the measures adopted by other countries, but warned of the limited impact of some actions, especially those of a financial nature.

“In the case of a reduction in interest rates, if banks do not feel that there are mechanisms to reinforce the sharing of credit risk, they will not be more willing to grant credit,” he said.

Mozambique on Tuesday registered 69 new cases of the new coronavirus, increasing the total to 15,770 but still with just 131 deaths, the Ministry of Health announced in a statement.

Source: Lusa