Mozambique’s government expenditure on salaries and remuneration fell 3.9% in the first half of the year to 107.2 billion meticais, as authorities press ahead with efforts to contain the public sector wage bill across a civil service estimated at between 357,000 and 370,000 employees and state agents.
According to budget execution data for the first half released by the Ministry of Finance, total personnel expenditure reached 109.8 billion meticais, equivalent to 51.2% of the annual allocation set aside for this category. Of that total, 107.2 billion meticais corresponded to salaries and remuneration.
The amount spent on salaries also represents 51.2% of the annual budget for this component and marks a 3.9% decline compared with the first half of 2025. The contraction follows a record full-year salary and remuneration expenditure of 209.1 billion meticais in 2025, which was 3% higher than in 2024.
In 2025, salary expenditure also exceeded the 205.6 billion meticais projected in the State Budget. Budget execution data show that 202.9 billion meticais were paid out in 2024, meaning expenditure rose by approximately 6.2 billion meticais in that year.
Containing the wage bill is one of the key recommendations of the International Monetary Fund (IMF), which has also called for structural reforms to strengthen public finance sustainability. In findings from its regular review published in February, the IMF warned that high civil service payroll costs, combined with rising debt service obligations, are crowding out resources available for development and social protection.
The IMF has also advocated a multi-year fiscal consolidation strategy anchored primarily in wage bill containment and broadening the tax base. Salary expenditure remains the largest component of the government’s current spending, covering an estimated 357,000 to 370,000 civil servants and state agents.
In a report published in March, the World Bank concluded that Mozambique’s public sector is not oversized by regional standards. The institution noted that the increase in personnel expenditure has been driven mainly by higher remuneration levels rather than growth in the number of employees.
According to the World Bank, the wage bill as a share of gross domestic product (GDP) rose from less than 5% in 2000 to around 15% in 2023, making it one of the primary sources of pressure on public finances. In the Medium-Term Fiscal Scenario 2027–29, the government plans to reduce that ratio from 12% of GDP in 2027 to 11.5% in 2028 and 10.7% in 2029.
To achieve that reduction, the government’s strategy includes limiting new recruitment, strengthening audits and proof-of-life checks, accelerating retirement processing, and reviewing allowances and seniority supplements. Among the measures envisaged is a 50% cut in the rate of civil and special seniority supplements. The issue remains politically sensitive, however, given the implementation of the Unified Salary Table (TSU), approved in 2022, which triggered unrest in sectors including health, education, and the security forces.
Overall, total public expenditure executed in the first half reached 157.5 billion meticais, equivalent to 43.4% of the annual budget. In real terms, this represents a 10.3% decline compared with the same period of 2025, reinforcing the signal of fiscal restraint observed in the first half of the year.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=534406
