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Food Inflation in Mozambique Exceeds 10% and Should be a Reference for Salaries – Economist

Food Inflation in Mozambique Exceeds 10% and Should be a Reference for Salaries – Economist

Mozambican economist Estrela Charles considered today that “annual food inflation” has exceeded 10% in the country and should have been a reference in the new minimum wages and not the average annual inflation, which stood at around 7%.

“Food inflation is between 10% and 11% and the minimum wage has increased between 3% and 4%, which means it is far short of what it should be, at least to cover the rise in food prices,” said Estrela Charles, an economist and researcher at the Center for Public Integrity (CIP), in statements to Lusa.

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The researcher said that the criterion that guided the approval of the new salaries at the beginning of this year is the accumulated annual inflation, which was between 6% and 6.7% and included all the products of the consumer’s basic food basket, but the level of increase in food prices is above 10%, she explained.

Estrela Charles underlined that the increases in the lowest salaries decreed at the beginning of this month do not restore the purchasing power of the workers.

She pointed out the case of a 371 metical (5.5 euros) increase for one of the sectors with lower salaries, noting that it does not “accompany”, for example, the recent increases of more than 500 meticais (7.4 euros) in rice and cooking oil.

The researcher stressed that the situation of workers is even more precarious given that they have been without increases in wages for the last two years, due to the fall in the economy, caused by the covid-19 pandemic, the impact of climate change and armed violence in Cabo Delgado province.

The government and the companies, he continued, have conditions to increase the minimum wages, because the economy is coming out of the recession of the last two years, which, in his opinion, can be seen by the increase in the offer of jobs.

Estrela Charles accused the executive and employers of “lack of interest” in paying better minimum wages and strengthening the purchasing power of workers

“Employers will always tend to set lower and lower wages so that they can make higher profits,” he said.

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For its part, he continued, the government has been reluctant to approve substantial minimum wages, because several members of the executive are also employers.

“A good part of the business sector in the country is made up of some members of the Government. There is a conflict of interest and the workers are left in this negotiating process isolated,” he said.

“The fact that the unions have demanded a minimum wage of 30,000 meticais [446 euros] and the Government has set the lowest wage paid in the country at just over five thousand meticais [74.3 euros] shows that the workers’ representatives were forced into this consensus, because the difference is about 25,000 meticais [371 euros],” concluded Estrela Charles.

Translated with www.DeepL.com/Translator (free version)

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