20 April 2017

Mozambique: Minimum Wage Falls Below U.S.$60 Per Month for First Time in a Decade

Photo: Technoserve
Workers process cashews in the Condor Nuts processing plant (file photo).

The lowest non-agricultural minimum wage, for civil servants, has fallen below $60 per month for the first time since 2006. In 2006 it was $54.50/month, but by 2014 it had risen to $98.65/mo; for 2017 it has fallen back to $59.51/mo.

Minimum wages from 1 April 2017 were approved and announced by the Council of Ministers yesterday, 18 April. There are now 16 different minimum wages, and in Meticais there were sharply different increases - only two sectors had increases above the 21.6% annual inflation rate to March and most were much below inflation. One of the lowest paid sectors, civil servants, had a 21.9% rise in their minimum wage, and workers in large gas, electricity and water companies receive a 22.3% rise in their minimum. The smallest increases in minimum wages were 5.5% for hotel workers (a new category), 5.8% for salt workers, and 6% for quarry workers. The agricultural minimum wage increases 10.4%.

But the rapid devaluation of the Metical in the past two years pushes minimum wages back to what they were a decade ago. The agricultural minimum wage falls from $99/month in 2014 to $54 in 2017. The mining minimum drops from $176/mo in 2014 to $104 now; industry falls from $145 to $89.

Attached is a special supplement with the complete minimum wage table and historic minimum wages and exchange rates, also posted here. There is now a quite good table of government salaries (not yet updated for these changes) here.

IMF Res Rep attacks lack of debt strategy

Mozambique's debt renegotiations have slowed down and the government has "no clear overview or strategy", warned IMF Resident Representative Ari Aisen in two recent speeches. And he warns that "new loans for investment projects are being contracted" without full discussion, including a $157 million Chinese export credit to fund the long-delayed digital migration project. The talks were to the donor coordination platform on 6 April and the US-Mozambique Chamber of Commerce on 12 April.

Aisen praises the cut to bread and fuel subsidies, and demand further cuts, including to the electricity subsidy. And he notes there is still a "substantial accumulation of arrears to suppliers (e.g. oil companies) and VAT refund." And he warns of fiscal problems in the large state companies. In his speeches, made before the new minimum wages were announced, Aisen specifically called for "containing the expansion of the wage bill," but the civil service minimum wage has been increased by the rate of inflation.

Voter registration delayed to January

As expected, electoral registration has been delayed until January 2018, in order not to conflict with the national population census 1-15 August 2017, the National Elections Commission (CNE) announced on 12 April. Because that is during the rainy season, it is likely that the registration will only take place in the municipalities which will vote in local elections on 10 October 2018. There are presently 53 municipalities with elected mayors and assemblies, but that number is likely to be increased as a result of government-Renamo negotiations on decentralization. The electoral law says the CNE must set the number of local assembly members six months before the election, and that is based on the  number of registered voters in each municipality. Processing and checking the electoral role takes up to two months. That means in practice registration must be completed by mid-February 2018.

National elections will be in October 2019 and there will have to be a national registration before that.

The election laws set the time frames. Municipal elections must be announced 18 months in advance, and within 60 days of the announcement (3 June) provincial elections commissions must be in place and in a further 30 days (3 July) district commissions must be in place. In agreeing to participate in 2014 national elections, Renamo was allowed to make major changes to the electoral law, and it opted to substantially increase the number of paid party people involved.

Each provincial and district commission consists of 15 members - 3 chosen by Frelimo Party, 2 by Renamo, 1 by the MDM (Mozambique Democratic Movement) and 9 from civil society. A total of 945 people (Maputo city does not have a separate provincial elections commission) for the present 53 municipalities. In addition there is an election secretariat STAE (Secretariado Tecnico de Administracao Eleitoral) which actually does the work. Each has a director, 2 deputy directors, 3 heads of sectors, 6 deputy sector heads and 6 technical staff - 18 people, or 1134 staff. Of those in STAE, 12 are appointed by parties (6 Frelimo, 4 Renamo, 2 MDM). Thus there are posts for 567 Frelimo-named people, 378 Renamo, and 189 MDM.

CNE spokesperson Paulo Cuinica said the CNE's estimate is that preparing the elections will cost 970 million meticais ($15 mn), but the government has informed the CNE that so far only 650 million meticais is available. The CNE hopes that donors will provide further money. The next step is organising office space, vehicles and equipment for the election commissions and STAEs.

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