The dollar, the drought, Renamo, the floods: Bosses warn over new minimum wages

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The dollar, the drought, Renamo, the floods: Bosses warn over new minimum wages

8:54 CAT | 24 Feb 2016

AIM / Minister of Labour, Employment and Social Security Victoria Dias Diogo presides the negotiations (file photo)

Mozambican employers are claiming that factors such as the recent depreciation of the national currency, the metical, against the US dollar, the severe drought in southern and central Mozambique, and the tensions with the rebel movement Renamo will influence any increase in the statutory minimum wage.

Negotiations on a new set of minimum wages began on Monday, at the first meeting this year of the Labour Consultative Commission (CCT), the tripartite bargaining body between the government, the employers and the trade unions.

This meeting discussed the country’s economic and social performance in 2015, which will form the basis for increasing the minimum wage.

Clearly the employers’ organization, the CTA (Confederation of Mozambican Business Associations), wants to keep any increase to a bare minimum. CTA deputy chairperson for labour, Rui Monteiro, said the economic, security and climatic adversities facing the country would clearly influence the wage negotiations.

The drought in the south and heavy rains in the north had influenced forecasts for growth, while the military tensions with Renamo were damaging the transport and tourism sectors of the economy. Monteiro believed that forecasts for a rise in the number of decent jobs available in sectors ranging from agriculture to coal and natural gas had been frustrated.

The unions, however, warn that the recent problems have eroded workers’ purchasing power. Maria Ferro, speaking for the main trade union federation, the Organisation of Mozambican Workers (OTM), pointed out that, largely due to the devaluation of the metical, “the prices of goods and services have risen, and in a short period the purchasing power of the majority of Mozambicans has fallen drastically, worsening poverty”.

Ferro said the OTM wants new minimum wages fixed “which help recover the purchasing power which workers have lost because of the corrosion of the currency, and which are necessary to improve the quality of life of citizens”.

In her speech opening the meeting, Labour Minister Vitoria Diogo said that a total of 302,188 jobs had been created in Mozambique in 2015. This is in line with the job creation target laid down in the government’s Five Year Programme – it is slightly more than 20 per cent of the 1.5 million jobs mentioned in the programme.

Diogo added that last year 129,000 citizens were trained in various specialisms. “This contributed to improving their insertion in the labour market, either as employees, or as people who opted for self-employment or for entrepreneurial activities”, she said.

As for the use of extra-judicial methods to solve labour disputes, Diogo said that over the year 7,246 disputes went to mediation, of which 5,924 resulted in an agreement between the parties involved.

She added that labour inspectors had visited 8,406 establishments, covering a total of 92,649 workers “which made it possible to safeguard and guarantee the correct and uniform application of the provisions governing labour relations and conditions, thus contributing to reducing conflicts within enterprises”.

Diogo urged all those involved in the wage negotiations “to transmit reciprocally the trust and openness necessary for the negotiations to take place with normality, calm and responsibility”.

The statutory minimum wages are increased every year, with the new wages taking effect as from 1 April. There is no longer a single minimum wage in Mozambique. Instead the work force has been divided into nine categories, each with its own minimum wage. Since several of these categories have been broken into sub-sectors, there are now 14 separate minimum wages.

The current minimum monthly wages range from 3,000 meticais (62.5 US dollars, at current exchange rates) for workers in the Kapenta (Lake Tanganyika sardine) fishery on Cahora Bassa lake to 7,800 meticais for workers in micro-finance companies.

Source: AIM