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Mozambique President Warns Protests Risk Pay Delays for Workers

Military police patrol the streets following protests in Maputo, Mozambique, on Thursday, Nov. 28, 2024. The continued disruption following election results disputes is hitting the already strained state finances with annual inflation in Mozambique edged up to 2.7% in October. (Kang-Chun Cheng/Bloomberg)

(Bloomberg) -- Mozambique’s president cautioned that ongoing protests against disputed Oct. 9 elections are increasing the risk of delays to civil servants’ pay, as the unrest hits tax revenues.

Fiscal receipts for November were below expectations because of the demonstrations, which began on Oct. 21, President Filipe Nyusi said in remarks on the state broadcaster Wednesday. 

“This worries me,” he said. “Because I may not be able to pay teachers’ and nurses’ salaries.”

Opposition leader Venâncio Mondlane has called for repeated demonstrations over the past six weeks to protest the voting outcome. The electoral authorities said he came second in the presidential race with 20%, and that the ruling party won, extending its 49 years in power. 

The unrest has left at least 76 people dead, according to local observers, and disrupted large parts of the economy.

Economic growth had already slowed to 3.7% in the three months ended Sept. 30. And leading economic indicators paint a bleak picture for November: Mozambique’s purchasing managers’ index fell to 48.4 — the lowest since January — and suggesting a contraction.

S&P Global Ratings separately warned that the government’s rising domestic debt levels, which have more than doubled since 2020, were becoming increasingly difficult to service. The unrest added to these pressures.

The government of the nascent natural gas exporter was already struggling with a ballooning public wage bill that drew warnings from the International Monetary Fund earlier this year. 

The protests have had a significant impact on the southeast African nation. Shops have been closed, ports suspended and the main border crossing with South Africa intermittently shut. 

That was the case again on Wednesday after Mondlane called for another week of protests. As with last week’s demonstrations, protesters at Mozambique’s Ressano Garcia border post blocked the route in the morning until 4 p.m. local time, halting traffic. 

The crossing is a key transit point for South Africa’s chrome producers that export the stainless-steel making ingredient via Mozambique’s Maputo port. 

So far, the blockages have not had a major effect on the supply chain. Transport companies have adapted and are making use of the hours when the border crossing is operating, said Kage Barnett of the Southern African Association of Freight Forwarders. 

©2024 Bloomberg L.P.