Mozambique: Social security reserve fund has $1B – government | Watch

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Mozambique: Social security reserve fund has $1B – government | Watch

6:58 CAT | 01 Aug 2024

Deputy Minister of Labour and Social Security Rolinho Farnela adresses the INSS national meeting in Maputo, on August 1st 2024. [Photo: AIM]

The reserve fund of Mozambique’s National Social Security Institute (INSS) has more than doubled in the last five years, surpassing one billion dollars in June, the government announced on Thursday.

‘It is important to note that throughout the five-year period, investment income exceeded projected income, and in this period there was an accumulated execution of investment income in the order of 127%,’ the deputy minister of labour and social security, Rolinho Manuel Farnela, said at the opening of the INSS national meeting in Maputo, taking stock of the last five years (2020 to 2024).

He added that from 2020 to the first half of 2024, the INSS Reserve Fund ‘doubled’, from 34 billion meticais (€493 million) to around 72 billion meticais (€1,044 million), ‘surpassing the one billion US dollar mark’.

‘Thus, we continue to guide the INSS towards safe and profitable investments as a way of ensuring that the system is sustainable in the medium and long term,’ said Farnela.

In the same speech, he highlighted the approval of the new Investment Policy and Strategy for 2021 to 2025, ‘which establishes the principles and criteria that guide investment decisions, having defined new allocation levels for each financial instrument and the respective return’.

He also pointed out that in the five-year period now ending, the government had planned to enrol 67,000 contributors and 457,927 beneficiaries, ‘with 61,863 contributors and 406,989 beneficiaries having already been enrolled, corresponding to realisations so far of around 92.3% and 88.9%, respectively’.

‘In cumulative terms, the system currently has 2,610,356 beneficiaries and 179,797 contributors,’ the deputy minister announced.

In the case of self-employed workers, 20,000 were expected to be registered during the period, ‘with a total of 29,818 having been registered by March 2024, corresponding to an implementation of around 149.1%, which “demonstrates the concern of this category of workers to be covered by Social Security”.

‘Cumulatively, the INSS currently has 51,196 [self-employed workers], of which 8,948 are active, corresponding to 17% of those registered,’ he said.

He also said that from January 2020 to May 2024, ‘it was possible to collect the global amount’ of more than seven billion meticais (€101.5 million) ‘against a five-year target’ of just over 5,960 million meticais (€86.4 million).

‘This debt recovery means a growth of around 135.74% concerning the debt collected in the previous five-year period, with the coordination with the social partners, the justice administration bodies, the national debt collection campaigns and the forgiveness of fines and interest on arrears within the scope of Covid-19 and routine inspections of debtor companies contributing greatly to this success,’ he recognised.

He warned: ‘As you can imagine, the current level of contribution debt has negative consequences, especially for the thousands of workers and their families who are deprived of their constitutionally enshrined social security rights.’

This is because he acknowledged, ‘despite the legal obligation to channel contributions to the Social Security System, we are very uncomfortable to see the existence of companies that still evade this duty, even though they deduct only 3% monthly from the salaries of their workers, an unethical and reprehensible behaviour, a crime of abuse of trust, under the terms of the law in force in the country.’

That’s why ‘it’s imperative to intensify inspection activity in companies, and the General Labour Inspectorate and the INSS can seek the necessary collaboration of our partners in order to obtain better results’.