Mozambique: Wage Reform Will Not Solve Cost of Living Problems

President Filipe Nyusi has recognised that the Single Wage Table (TSU), introduced this month in public administration, does not constitute a solution to the rising cost of living.

The president was speaking in Maputo, on 20 July, to members and supporters of the ruling Frelimo Party, at a ceremony held to celebrate Mozambique's election as a non-permanent member of the United Nations Security Council.

The government has decided to postpone until August the payment of most of the new wages in accordance with the Single Wage Table due to some discrepancies in the calculations made for allocation of the new wages.

On 19 July, the Minister of Economy and Finance, Max Tonela, explained that about 21,000 State employees will receive the minimum monthly wage, of 8,756 meticais (US$137, at the current exchange rate) in July. This is a rise of over 87 per cent compared with the previous minimum. However, everyone paid above the minimum wage will have to wait until August to receive their new salaries.

President Nyusi confirmed that serious inconsistencies discovered in the TSU have forced the government to suspend paying most of the new wages. But the President thought that such difficulties are normal in a complex process. He noted that the TSU could not be regarded as a finished product and inevitably more corrections and adjustments would have to be made. The important point, he stressed, was that the government had decided to reduce imbalances and improve wage conditions in the public administration. "Don't panic because things are being corrected", he urged. "It's like someone carving a sculpture - he improves it whenever he notices some defect".

President Nyusi assured state employees that they will all be paid. Those who, for whatever reason, have not yet been included in the TSU, will receive their old wages, and increases under the TSU will be backdated.

President Nyusi blamed part of the current inflation on the Russian conflict with Ukraine, which had triggered increases in fuel and grain prices. The conflict "has enormous influence on the country's economy, but Mozambicans should not lose focus. It is urgent to accelerate domestic production as a way to reduce dependence on foreign donations", the President urged.

"I would like us to work harder so that we can reduce imports. By reducing imports, we will have a greater capacity to solve our problems", he added.

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