This is Mozambique’s highest minimum wage increase since 2011

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This is Mozambique’s highest minimum wage increase since 2011

3:19 CAT | 20 Apr 2017

O País

The highest minimum wage is 10,400.00 meticais and the lowest is 3,642.00 meticais

The government approved yesterday minimum wages to take effect from April 1st this year. They are the highest increases since 2011. But a brief look at basic wages leads to the conclusion that in nominal terms, national minimum wages are still modest. In industrial fisheries, for example, the 20.97 percent increase (a five year record) makes for an increase of only 405.00 meticais to 3,780.00 meticais. In agriculture, the 10.4 percent increase corresponds to just over 300.00 meticais. In both cases, the magnitude of the increase is far from generating a noticeable difference in the beneficiaries’ budget in a context where the cost of living has increased significantly in a short time.

In the financial sector and in all sectors, where the base is relatively broader (8,750.00 meticais), the increase of 18.8 percent increases the minimum wage by 1,650.00 meticais.

In its communication on salary adjustments, the government has not given the value of the current household consumption basket in Mozambique. It is only known that the cost of living has been worsening relatively quickly as a result of increases in the price of basic consumer products. Last year, inflation hit a record high of 25.27 percent. In the first quarter of this year, decisions such as the suspension of fuel subsidies and the consequent gradual increase in prices are pushing the prices of all products up, with transport in the spotlight.

At the same time, the suspension of the wheat flour subsidy has pushed up the price of bread. Charcoal has increased from 1,000.00 meticais to about 2,500 meticais in just a few months.

Are the minimum wages possible?

In a press conference to announce the decisions of the Council of Ministers, held on Tuesday, the Minister of Labour, Employment and Social Security, Vitória Diogo, explained that the wages between employers and workers agreed are the best possible, given the necessity to contain expenses in the face of the state’s financial difficulties.

The Mozambican state has been financing its expenses exclusively through domestic revenues since external aid to the state budget was suspended by the program support partners a year ago.

Given the current situation, the minister draws attention to the need to accept sacrifices as a means of maintaining existing jobs. This warning stems from the fact that most public enterprises in Mozambique pay above minimum wages.

Cyclone Dineo reconstruction

The government also announced yesterday that some of the funds needed for the reconstruction of infrastructure destroyed by Cyclone Dineo exist. Government spokesman Mouzinho Saíde said surveys revealed that more than 1.4 billion meticais was needed with more than 605 million meticais for immediate response and a little over 827 million meticais for reconstruction.

More than 498 million meticais have already been mobilised for the immediate response, leaving a deficit of approximately 106 million meticais. For the reconstruction, 8.6 million were mobilised and applied, the deficit being 818.6 million meticais.

Source: O País