Mozambique: Public wage bill up 9.9% in Q1

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Mozambique: Public wage bill up 9.9% in Q1

4:01 CAT | 03 Aug 2023

File photo: DW

Operating expenses of the Mozambican state increased by more than 10% in the first quarter, to almost 77,522 million meticais (€1,110 million), driven by the increase in wages, according to official data consulted today by Lusa.

According to the economic and social balance of the execution of the State Budget from January to March, by the Ministry of Economy and Finance, this performance still corresponds to 24.5% of all state expenditures foreseen for this year, estimated at almost 316,919 million meticais (€4,540 million).

The biggest item concerns personnel expenses, which grew by 9.9% in the first quarter compared to the same period of 2022, to more than 48,478 million meticais (€694.5 million), representing 26.2% of the total budget for the 12 months. Specifically, salaries and remunerations represented, in three months, an increase in public expenditure of 10.8% compared to the first quarter of 2022, to almost 47,260 million meticais (€677 million).

On July 14, the International Monetary Fund (IMF) advised that the Mozambican government should reduce the “wage bill in line with regional peers”, in order to “create fiscal space for high-priority spending”, and invest in priority areas, such as combating food insecurity and poverty.

Public debt costs increased by 48.3% in the first quarter, to almost 12,671 million meticais (€181.5 million) and capital expenditure, relating to investments, namely in public works, grew by 44.6%, to more than 376 million meticais (€5.4 million).

The Mozambican state expects to reduce by 500 million meticais (around €7.2 million) the civil service wage bill with corrections to be made after audits carried out until July.

“About 500 million meticais: this will be the reduction resulting from the impact of the audits, due to the corrections that will be made,” General Inspector of Finance Emanuel Mabumo told a press conference in Maputo in June.

The audits are among measures announced at the beginning of the year by the government to contain the growth of the wage bill with the implementation of the Single Salary Rate (TSU), contested in particular by doctors, who have been on national strike since July 10.

Inquiries into the accounts cover 374,000 state employees from all areas. At this point in time, almost half of the cases had already been analysed and non-compliance had been detected in 20%, the inspector general said.

Emanuel Mabumo predicted that “this average will continue to obtain” until the end of the audits, which allows moving forward with the estimate of 500 million meticais monthly correction.

The TSU was approved in 2022 in order to eliminate asymmetries and keep the state’s wage bill under control in the medium term, but initial implementation caused wages to skyrocket by around 36%, from 11.6 billion meticais a month (€169 million) to 15.8 billion meticais (€231 million).

Source: Lusa