Wages boosted Mozambique’s government spending by 10% in the first nine months of the year

According to official data accessed by Lusa this Friday, the Mozambican state’s operating expenses increased by 9.4% in the first nine months of the year, to 237.414 million metichais (3.392 million euros), driven by rising wages.

According to the Economic and Social Balance of Government Budget Execution for January-September of the Ministry of Economy and Finance of Mozambique, this figure corresponds to 78.9% of all government operating expenditures planned for this year, estimated at almost US$316,919 million. meticais (4.520 million euros).

The largest item is personnel costs, which up to the end of September increased by 16.1% compared to the same period in 2022 and amounted to almost 146.365 million metises (2.091 million euros), representing 78.9% of the total amount budgeted for budget for 12 months.

“The growth recorded in personnel costs is justified by the effects of the implementation of the Unified Salary Table (UST), introduced in the second half of 2022 as part of the reform of the remuneration system for civil servants,” the document says.

In particular, salaries and wages represent an increase of 17.9% in public expenditure in nine months compared to the same period in 2022, to 141,641 million meticais (2,024 million euros), equivalent to 80.4% of the budget for the entire year.

The application of the new civil service pay scale is strongly contested by various professional classes such as doctors and teachers, with record salary delays and cuts in the security forces being criticized by various segments of the Mozambican government apparatus.

Approved in 2022 with the aim of eliminating asymmetries and maintaining government control over the wage bill in the medium term, its launch resulted in wage growth of approximately 36% at a cost of 11.6 billion metis per month (€169 million per month). up to 15.8 billion metits/month (231 million euros/month).

The new salary matrix in the state has 21 levels – from 8,756 to 165,758 metz (from 134 to 2,580 euros) instead of 103 levels, as it was before.

The Mozambican government estimates the TSU’s annual losses at 28,450 million meticais (€406.5 million), which are disputed by several sectors of the public service and which result in delays in the payment of wages.

According to the documents justifying the proposal of the Economic and Social Plan and State Budget (PESOE) for 2024, discussed in Parliament, the government is considering the consequences of applying this measure, taking into account the initial forecast of 19,200 million metizay (274.4 million euros), announcing “some inconsistencies in the employee qualification process.”

The TSU defines and harmonizes the rules and criteria for establishing the remuneration of civil servants, employees and members of state and judicial bodies, “with the main goal of reducing the wage bill to a level compatible with fiscal sustainability, thereby creating fiscal space to cover other types of expenses, e.g. investment,” explains the government.

“However, given the need to bring the impact indicator to the originally predicted level, the government is implementing additional measures,” the document says, citing as an example an audit of the salaries of employees and representatives of government, civil and military bodies. , a review of leadership, representation and location allowances, the retirement process for some 25,278 civil servants and agents or the “rationalization of new hires.”

It also states that “as a result of measures” to “reduce the weight of the wage bill and other personnel costs”, these measures are set in the 2024 budget at an amount of more than 199.375 million metises (2.849 million euros), equivalent to 13% GDP, which is one percentage point less than budgeted for this year.