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IMF: “Implementing the Single Wage Scale in Mozambique Cost More Than Expected”

IMF: “Implementing the Single Wage Scale in Mozambique Cost More Than Expected”

The International Monetary Fund (IMF) said on Thursday, 25 January, that the implementation of the Single Wage Scale (TSU) in Mozambique cost “more than expected”, pointing out that it absorbed around 28.5 billion meticals.

“The initial expected cost of reforming the wage bill over the 2022-23 period was 19.2 billion meticals (1.4 per cent of GDP). However, the implementation of the TSU ended up costing 28.5 billion meticals (2.1 per cent of GDP),” the institution said in a report.

The slippage in implementation costs, according to the financial organisation, was mainly due to difficulties caused by the complex reform of the wage bill, including the incorrect mapping of civil servants to the new salary scale.

“The wage-saving measures were insufficient to meet the costs. The additional cost was around 2.5 per cent of GDP in 2022. The fiscal slippage was financed mainly through expensive domestic resources,” it clarified.

The IMF also stressed that the TSU was initially intended to “improve the predictability of the wage bill and spending by unifying wage scales and rationalising allowances between the various classes and areas of the Civil Service”.

“Over the last decade, the civil service wage bill in Mozambique has risen from 10 per cent of GDP to 17 per cent,” he said.

The TSU was approved in 2022 with the aim of eliminating asymmetries and keeping the state wage bill under control in the medium term. However, its inception caused salaries to skyrocket by 36 per cent, from an expenditure of 11.6 billion meticais/month to 15.8 billion meticals/month.

The new state salary matrix has 21 levels, from 8756 to 165,700 meticals.


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