Mozambique: Government Promised IMF Big Wage and Staff Cuts

The government promised the IMF big wage and staff cuts in order to gain IMF approval in May of a $456 mn Extended Credit Facility. The total civil service wage bill is to be cut by 17% by 2026, a cut of $425 mn per year from a peak in 2023. Staff cuts will be achieved “by replacing only one in three civil servants leaving the civil service, except in education, health, justice and agriculture.”

The IMF has always been obsessed with cutting the wage bill, but has never succeeded. And the new…