Mozambique: Salaries increase State expenditure by 2.6% in H1

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Mozambique: Salaries increase State expenditure by 2.6% in H1

7:23 CAT | 03 Oct 2023

FILE - For illustration purposes only. [File photo: TVM]

The Mozambican state’s operating expenses increased by 2.6% to 149,656 million meticais (€2,212 million) in the first half of the year, mainly driven by increases in salaries, according to official data accessed by Lusa.

The Ministry of Economy and Finance report on the execution of the state budget from January to June shows this performance corresponding to 47.2% of all state expenses planned for this year, valued at almost 316,919 million meticais (€4,540 million).

The largest item is salaries, which grew 6.8% in the first half of 2023 when compared to the same period in 2022, to almost 92,174 million meticais (1,361 million euros), or 49.8% of the total budget allocation for the 12 months.

Specifically, salaries and wages represented an increase in public expenditure of 8.2% in six months when compared to the first half of 2022, to almost 89,282 million meticais (€1,319 million), the equivalent to 50.5% of the budget for the whole year.

On July 14, the International Monetary Fund (IMF) advised the Mozambican government to reduce its 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.

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

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

The audits are part of the measures announced at the beginning of the year by the government to contain the growth of the wage bill resulting from the implementation of the Single Salary Rate (TSU), which is contested in particular by doctors, who called a national strike, later suspended.

The investigations into the accounts cover 374,000 state employees from all areas.

At the time, almost half the cases had already been analysed, and anomalies detected in 20% of them, the inspector general said.

Emanuel Mabumo predicts that “this average will remain the same” over the remainder of the audits, resulting in the estimate of a 500 million meticais correction in monthly wages

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 salaries to soar by around 36%, from 11.6 billion meticais/month (€169 million) to 15.8 billion meticais/month (€231 million).

Source: Lusa