The Ministry of Economy and Finance (MEF) has made it known that the Single Wage Scale (TSU), in force since July 2022, will continue to put pressure on public spending in the medium term, pointing out that the pessimistic scenario foresees an estimated additional expenditure of 31 billion meticals (480.9 million dollars) in 2025.
‘This scenario is explained by the sensitivity of the wage bill to slower growth in Gross Domestic Product (GDP). The medium-term outlook for the wage bill, as a proportion of GDP, suggests a slower reduction in the pessimistic scenario (13.6 per cent on average) compared to the base scenario (12.3 per cent on average), with a converging trend in 2027,’ the organisation explains in a document.
The Fiscal Risks Report 2025, consulted on Monday 2 September by DE, states that a significant portion of the resources generated by the economy are being absorbed by spending on wages and salaries, a scenario that has worsened with the start of the implementation of the TSU, limiting the government’s ability to invest in priority areas.
‘The management of the payroll has been a major concern for public managers, so there is a need to find mechanisms for its sustainability,’ he reveals.
In May, the International Monetary Fund (IMF) stated that there is a significant risk that spending on public salaries will exceed the 2024 budget law by approximately 12 billion meticals (188.1 million dollars). This increase could jeopardise the country’s financial stability, which has already been facing budgetary challenges since 2022.
The IMF emphasised at the time that excessive spending on public salaries is a growing concern, pointing out that in 2022-23 there was a considerable increase that could be repeated this year. ‘Rationalising spending on the wage bill is crucial to maintaining fiscal sustainability.
Cleusia Chirindza
