Good afternoon. The latest risk to Mozambique’s economy that is keeping the finance ministry up at night, is the diminishing ratio of active civil servants to retired civil servants. According to a report from Lusa on a Ministry of Economy and Finance report on fiscal risks for next year, there are now just four working civil servants to each pensioner; and that ratio is set to drop to just two to one by 2027.
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Mozambique’s pension system is dysfunctional in some obvious ways. Retirement age was lowered from 65 to 60 in 2017, though it is now back at 65, for men at least. But many retirees are entitled to continue receiving 100% of their salary on retirement, having contributed just 7% of each pay packet throughout their career.
