Mozambique public sector wage spending falls 3.9 percent

Mozambique's Ministry of Finance reported a 3.9 percent decrease in public sector salaries and remuneration during the first half of the year, totaling 107.2 billion meticais. This reduction follows a period of record spending in 2025, where expenditures reached 209.1 billion meticais, exceeding both the budget and the previous year's totals.

Total personnel costs for the first half of the year reached 109.8 billion meticais, consuming 51.2 percent of the annual allocation. This fiscal tightening aligns with recommendations from the International Monetary Fund (IMF), which has cautioned that high public-sector payroll costs and debt servicing limit resources available for social programs and productive investments.

Data from the World Bank indicates that payroll costs as a percentage of GDP rose from under 5 percent in 2000 to approximately 15 percent in 2023. To manage this, the government's Medium-Term Fiscal Scenario (2027-2029) aims to reduce the weight of salaries in the GDP from a projected 12 percent in 2027 to 10.7 percent by 2029 through measures such as limiting new hires and accelerating retirements.