30 April 2018

Mozambique: Minimum Wages Rise, but Still Much Below 2014 Peak Levels

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

Minimum wages have been increased 6-15% in Metical terms and 17-30% in dollar terms, but are still significantly below 2014 levels in dollar terms. There are 16 different minimum wages, and new levels were announced on 25 and 26 April.

There have been increases in Meticais every year, but the sharp devaluations in 2015 and 2016, trigged in part by the secret debt revelations and aid cuts, meant substantial falls in the minimum wages in real terms.

Our annual tables and graphs of minimum wages and exchange rates since 1996 are attached to this mailing and available on http://bit.ly/MinWage18

Minimum wages range from a low of $66-70 per month (kapenta fishers, farm workers, civil servants) to $76 for bakers and $89-109 for hotel, construction and industrial workers. There are two higher wage rates: $135 for miners in large companies and $196 for those in the financial sector. Minimum wages were highest in dollar terms in 2014, and are now 19-33% lower.  Civil servants, farm workers, and bakers have taken the biggest hit, with minimum wages 29-33% down.

The dollar exchange rates had been steady at $1 = MT 25-30 or two decades, but in 2015-6 jumped, reaching $1 = MT 78 in late 2016. By mid 2017 it had fallen back to $1 - MT 60 and has remained there. The exchange rate to the South African Rand is important because so much of what is purchased in Maputo is imported from South Africa. This rate fluctuates more because of shifts in the Rand against the dollar. It was R1 = MT 3 in 2013-5, jumped to R1 = MT 5.6 in late 2016, and has stayed around R1 = MT 5 since mid-2017.

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