Mozambique: State electricity company ends salaries in dollars after criticism – Lusa

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Mozambique: State electricity company ends salaries in dollars after criticism – Lusa

7:25 CAT | 11 May 2021

File photo: O País

The Mozambican state electricity company (EDM) has eliminated the payment of salaries in dollars, after criticism raised following the company’s announcement of the use of an exchange rate higher than that imposed by the Central Bank.

In a statement it released on Monday, the firm determined the payment of all EDM company salaries in national currency.

The state power company will also convert the remuneration component in US dollars to meticais, at the average reference exchange rate in the market in force on the date of this deliberation.

In the note, it is also announced that EDM cancels a circular of 6 May that fixed an exchange rate of 75 meticais per dollar for the portion that must be paid in dollars of remuneration of certain career structures.

The EDM press release follows the release in the media of a circular in which the company announced it would calculate salaries based on an exchange rate of 75 meticais per dollar, due to the devaluation of the US currency against the Mozambican currency.

The elimination of salaries in dollars was decided at an extraordinary general meeting of the company, which was attended by the State Management and Participation Institute (IGEPE), the manager of the Mozambican state’s holdings, the statement said.

Also read: Mozambique: EDM sets exchange rate for workers remuneration at 75 meticais per US dollar – O País.

The Centre for Public Integrity (CIP), a Mozambican civil society organisation, has EDM of committing an illegal act, by setting an exchange rate that is different to the official rate for calculating the salaries of its workers.

The exchange value between the metical and the dollar applied by the company is above the exchange rate set by the Bank of Mozambique (BM), which is around 59 meticais to the dollar.

The CIP urged the Mozambican Public Ministry to intervene.

The former president of the Mozambican Bar Association (OAM), Flavio Menete, confirmed to Lusa the indignation already expressed to television channel STV against EDM’s decision.

“It is not up to each citizen or each entity to fix its exchange rate. The exchange rate is fixed [by the regulator],” Flávio Menete told STV.

Menete argued that public companies should be guided by careful management, focusing on minimising spending.

In Mozambique salaries paid in meticais but using the dollar as the currency of reference have fallen sharply in recent months due to a sharp appreciation of the metical.

Source: Lusa