Mozambique

Labour Market Profile 2012

Executive Summary
MainIssuesontheLabourMarket Mozambique is one of the poorest and least developednationsintheworld.Atthesametime growth has averaged 9% for a decade. The impressive growth has largely been in extractive industriesandinparticularthealuminiumexport. Growth is expected to accelerate much more, as Mozambique has large resources of coal and off shoregas,whicharebeginningtobeextracted. The large growth has created few jobs, because they are in capital intensive extractive industries and much of the wealth does not reach the broader population. As example, of $1 paid to the state from the Mozal aluminium smelter and estimated$21leavesthecountry. Mozambique also has the lowest average years of schooling in the world. The low skill level means that companies often import skilled labour, especially from Portugal where there is high unemployment. There is in particular demandforvocationallyeducatedlabour. Two trade union federations exists, OTMCS and CONSILMO. OTMCS was created by the ruling FRELIMO party and a common criticism of OTM CS is that it retains too close ties to FRELIMO. OTMCS has recently been acting more independent than in the past, by criticised the government for not being consulted on poverty reductionplansandfortheINSSscandals. There are good working relations with the employers organisations and CONSILMO and OTMCSalsocooperates. Compared to similar SubSaharan African countries and the high rate of poverty in Mozambique, the minimum wage at $125 is higherinMozambique. LabourMarketDevelopments Questions of how to handle foreign nationals workingandinvestinginMozambiquehasgained increased government focus in 2012. Foreign investors are often accused breaking the labour lawleadingtoseveralindustrialdisputes,Chinese nationals were expelled for working illegally,1 a managing director and French national was almost expelled for alleged mistreatment of workers2 and quotas of foreign nationals in firms wereestablished. Mediation of industrial disputes is getting more institutionalised, as mediation and arbitration centreshaveopenedinallprovincesin2012.The centres are to resolve industrial disputes before theygotocourt. The INSS, which runs the main social security schemes, was rocked by corruption scandals in 2012, since much of the funds that should have gone to pensions had disappeared. Assets were freezed and top leaders were fired. OTMCS and CTAcalledforreformofINSS The food subsidy programme (PS) was replaced by a Basic Social Subsidy Programme (PSSB) for households with no adults able to work, and a public works programme, for households with an adult able to work. Benefits are to more than doubletoabout239Meticalpermonth($8). The Public Sector Workers Union SINAFP has not yet been legalized. A draft law has been submitted to the parliament for approval. OTM expectsthatthelawwillbeapproved.

Contents

TradeUnions...........................................................................................................................................................3 TradeUnionsinMozambique........................................................................................................................................4 EmployersOrganisations........................................................................................................................................5 CentralTripartiteStructures....................................................................................................................................5 NationalLabourLegislation......................................................................................................................................6 ILOConventions......................................................................................................................................................6 TradeUnionRightsViolations..................................................................................................................................7 WorkingConditions.................................................................................................................................................8 Workforce...............................................................................................................................................................9 Unemploymentandunderemployment...................................................................................................................... 10 Sectoralemployment...................................................................................................................................................10 Migration......................................................................................................................................................................11 InformalEconomy........................................................................................................................................................12 ChildLabour.................................................................................................................................................................12 Gender..........................................................................................................................................................................12 CharacteristicsoftheWorkingAgePopulation.......................................................................................................13 SocialProtection ....................................................................................................................................................15 GeneralEconomicPerformance.............................................................................................................................16 Trade.....................................................................................................................................................................17 Tradeagreements........................................................................................................................................................17 ExportProcessingZones ...............................................................................................................................................17 References ............................................................................................................................................................18

Trade Unions
TradeunionsinMozambique (2012)
Numberoftradeunions Dues(standard) Membersoftradeunions(OTM) Tradeunionmembersshareoflabourforce Tradeunionmemberstowagedworkers Femalemembershareoftradeunions(OTM) NumberofCBAs(OTM) WorkerscoveredbyCBAs(OTM) ShareofwagedworkerscoveredbyCBAs Labourforce(2011)
3

According to the Friederich Ebert Stiftung,5 OTMCS retainsclosetiestotherulingFRELIMOparty.

23 N/A 128,710 1.13% 13.8% 25% 1,297 207,735 22% 11.3million

ThemissionofOTMCScoversorganisingofworkersin Mozambique and improvement of their living and working conditions, participation in tripartite negotiations with the government and the employers around changes in the labour law and negotiations of minimum salaries with the government and employers. The Public Sector Workers Union SINAFP, which is affiliated to OTM, is in the process of being legalized According with a draft of law to legalize SINAFP, state officials who occupy positions of leadership, confidence and leadership, senior officials and entities named by the President, functions and diplomatic careers and inspection and agents with fixedterm contracts are prohibited to be in unions, according to the proposal of law This standard does not cover employees with provisional appointment, retired, dismissed or expelledandonleaveindefinitelyandrecorded. ThedraftLawonPublicAdministrationUnionizationin Mozambique still excludes employees and agents assignedtothePresidency,theentitiesresponsiblefor collecting taxes, foreign trade, the forces of defense andsecurity,correctionalservices,thenationalservice publicwelfareandthemagistracy. (CONSILMO) Confederacao Nacional dos Sindicatos IndependenteseLivresdeMocambique CONSILMOhasfourmemberorganisationswithatotal of 106,000 members.6 CONSILMO was founded in 1992 as a breakaway union from OTMCS, due to the ties to the FRELIMO party. It is headed by Secretary General Mr. Jeremias Timana. It is involved in the CCT (tripartiteworkingcommission)atthenationallevel.

(OTMCS)OrganizacodosTrabalhadoresde MocambiqueComiteSindical4 The Mozambican National Trade Union Centre (OTM CS) was established in 1976 as a trade union federation for all Mozambican workers, albeit with a very strong link to the ruling party, FRELIMO. In the mid 1980s, OTMCS became officially independent and began to establish unions for the various sectors. OTMCShas14affiliatednationalunions.Notcounting the unions not yet legally recognised, or the informal economy umbrella association associated with OTM CS, with approximately 60.000 members. OTM covers allprovincesinMozambiqueandisaffiliatedtoITUC. OTMCS highest authority is the Congress, which convenes every five years. The Executive Secretariat, composed of four members including the General Secretary Mr. Alexandre Munguambe, is in charge of dailyoperations. OTMCS has been through a range of restructuring exercises since the beginning of the 1990s, both as partofbecomingmoreindependentfromgovernment as well as to strengthen the affiliated unions.

TradeUnionsinMozambique9 Members,Dues,CollectiveBargainingAgreements(CBA)andOccupationalSafetyandHealthcommittees TradeUnion/ TradeUnionCentre

OTMCSOrganizacodosTrabalhadoresde MocambiqueComiteSindical CONSILMOConfederacaoNacionaldos SindicatosIndependenteseLivresde Mocambique SINPOCAFPortandRailwaysWorkers Union SINTIQUIGRAChemical,Graphicand RubberWorkersUnion SINTIMEMetallurgicandEnergyWorkers Union SINTIASugarWorkersUnion SINECOSSECommerceandService WorkersUnion SINTIMAPMarineandFishingWorkers Union SNEBBankWorkersUnion SINTACAviationandCommunication WorkersUnion SINTICCashewNutWorkersUnion SINTIABFoodandDrinksWorkersUnion SINPEOCDockWorkersUnion SINTAFAgricultureandForesterWorkers Union SINTESPGMSecurityandPrivateGuard SINTELMO SINAFPPublicSectorWorkersUnion SINEDEducationSectorWorkersUnion

Affiliation Tonational tradeunion centre

OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS OTMCS (Affiliated, notlegally recognised) OTMCS (Associated organisation) CONSILMO CONSILMO CONSILMO CONSILMO Nonaffiliated Nonaffiliated

Total Members (2012)

128,710 2,826 7,323 9,923 21,816 11,492 8,236 4,776 4,116 4,650 8,274 4,673 36,460 2,145 20,256 2000

Dues Female Members

32,066 254 1,793 1,010 3,928 4,823 436 2,492 1,348 2,050 1,709 55 9,553 645 (share of salary)

Number ofCBAs
1,297

Workers covered byCBAs

207,735 4,938 13,417 17,124 30,385 23,408 13,480 8,452 5,475 6,500 12,561 7,059 60,012 2,678 2,246

Numberof OSHcom mitteesat workplaces

1,970

ASSOTSIAssociationofInformalEconomy OperatorsandWorkers SINTRATNationalUnionofRoadTransport Workers SINTIHOTSINationalUnionofWorkersin theHotelIndustry,TourismandRelated Industries SINTESPNationalUnionofWorkerof PrivateSecurityCompaniesandGuards SINTICIMNationalUnionofWorkersof CivilConstruction,Woodworkersand Miners SNJNationalUnionofJournalists SNPNationalUnionofTeachers

Employers Organisations

(CTA) Confederao das Associaes Econmicas de Moambique7 CTA the Confederation of Economic Associations of Mozambique, was established in 1996 as the Working Commission of Associations a few years after the end of the civil war. CTA changed its name in 1999. It is headedbyPresidentMr.RogrioManuel. The mission of CTA is to create a business environment favourable to the development of the private sector, and a strong employers organisation movement able to influence policies, be participatory, socially responsible, and promote economic competitivenessandqualityofbusiness. CTA maintains a structured dialogue with the governmentandpublishesseveralstudiesofsectors. 70 trade associations, chambers of commerce, federationsandforumsaremembersofCTA.

Central Tripartite Structures

MediationandArbitration Collective disputes are governed by the Labour Law. A dispute must be mediated by a body chosen by the parties in the dispute, or otherwise a Labour Mediation and Arbitration Commission. The parties can choose voluntary arbitration, whereas arbitration is compulsory in essential services, a broad definition that includes workers in the Export processing Zones. An arbitration committee is appointed, with three members, one from the parties in the dispute and one appointed by the mediation and arbitration body. Cases unresolved by mediation or voluntary arbitrationarereferredtothelabourcourt. Mediation is getting more institutionalised into labour mediation and arbitration centres, which were extended to all provinces in 2012.8 The mediation
13

the constitution to be amended so it can become compulsory.10 National Labour Advisory Commission (Comisin ConsultivadelTrabajoCCT)11 The tripartite CCT analyzes and gives advice on: restructuring and development policies, participation of representative organizations of employers and workers and comments the ILO's standardsetting instruments. Otherbi/tripartiteorgans4 NationalSocialSecurityInstitute(INSS) National training and professional institute (INEFP) NEPAD PARPA PARPAII ResolutionandArbitrationForum Mozambicandeputygroup

and arbitration centre (COMAL) is extended to all the provinces and reports indicate that in 2010 there were 793 requests for mediation. 500 reached agreement, 84 were pending and 2.064 were in an impasse. In 2012, they were a total of 8847 cases from which 6357 have reached agreement, 985 are pending and 1505 are in an impasse. The figures show that in fact the body is functioning.9
Mediation is a compulsory step according to the Labour Law, however in 2011 the constitutional court declared this unconstitutional. The CCT has called for

National Labour Legislation

Constitution12 Theconstitutionfrom1990guaranteesthefreedomof association and unions. It recognises to strike except in essential services and prohibits lockouts. The constitution also guarantees the right to work, fair remuneration,healthandsafetyatwork,equalpayfor equal work. It prohibits forced and child labour. It also specifically mentions different industrial sectors and meansofproduction. LabourLaw13 The Labour Law of 2007 sets general principles and regulates individual employment relations, such as for hiring, firing, working hours, remuneration, occupational safety and health, vocational training, social security and labour inspection. The law also regulates collective labour relations, by regulating and establishing rights of trade unions and employers organisations. The Labour Law is the most important labour legislation. Several other legislations exists which regulates and sets standards and restrictions for the labourmarket.14

ILO Conventions
RatifiedILOConventions15
Subjectand/orright Convention Ratification date

FundamentalConventions
Freedomofassociation andcollectivebargaining Eliminationofallforms offorcedlabour Effectiveabolitionof childlabour Eliminationofdiscri minationinemployment C087FreedomofAssociationandProtectionoftheRighttoOrganise,1948 C098RighttoOrganiseandCollectiveBargainingConvention,1949 C029ForcedLabourConvention,1930 C105AbolitionofForcedLabourConvention,1957 C138MinimumAgeConvention,1973 C182WorstFormsofChildLabourConvention,1999 C100EqualRemunerationConvention,1951 C111Discrimination(EmploymentandOccupation)Convention,1958 1996 1996 2003 1977 2003 2003 1977 1977

GovernanceConventions
Labourinspection Employmentpolicy Tripartism C081LabourInspectionConvention,1947 C129LabourInspection(Agriculture)Convention,1969 C122EmploymentPolicyConvention,1964 C144 TripartiteConsultation(InternationalLabourStandards)Convention,1976 1977 Notratified 1996 1996

UptodateConventions
Workingtime C014WeeklyRest(Industry)Convention,1921 1977
FundamentalConventionsaretheeightmostimportantILOconventionsthatcoverfourfundamentalprinciplesandrightsatwork.Equivalent tobasichumanrightsatwork. GovernanceConventionsarefourconventionsthattheILOhasdesignatedasimportanttobuildingnationalinstitutionsandcapacitiesthat servetopromoteemployment.Inotherwords,conventionsthatpromotesawellregulatedandwellfunctioninglabourmarket. Inaddition,thereare71conventions,whichILOconsidersuptodate"andactivelypromotes.

Trade Union Rights Violations

According to ITUC:16 Employers continued to ignore collective agreements, as an example at a cashew nut factory showed. There was concern about the increasing use of casual and agency labour, as employers tend to exploit their more vulnerable position and seek to keep unions at bay. There are good relations between trade unions and employers organizations at national level, whereas the local level suffersfromemployerhostilitiestowards According to the U.S. Annual Human Rights Report:17 Workersexercisedsomeoftheirrightsinpractice.For example strikes, were infrequent but did occur. Similarly, although the law provides for the right of workers to organize and engage in collective bargaining, such contracts covered less than 2% of the work force. Furthermore, there were reports that many companies continued to engage in antiunion discrimination by replacing people at the end of contracts, dismissing workers for striking, and not abidingbycollectivebargainingagreements. The countrys leading trade union organization, OTM CS, was widely perceived to be biased in favour of the government and the ruling party,FRELIMO, butduring the year it acted more independently than in the past. For example, in April OTMCS criticized the government for not consulting with it on plans for measures to alleviate the rising cost of living, despite the organizations membership in the tripartite forum oncostoflivingissues.

Working Conditions

Wagesandearnings Monthlyaverage,medianandlegalminimumwages
Source Minimumwagein manufacturing (2012) %minimumwageto valueaddedper worker(2012) WageShare Unadjusted (2009) Growthofreal averagewage (20082012) Growthofreal minimumwage (20042011) Clubof 18 Mozambique Doing 19 Business Current Metical 3,585 2011 US Dollar 125

With a monthly minimum wage of around $125 in the manufacturing sector, the minimum wage is still higher than many other African countries, where the national minimum wage tends to be around $40$80 permonth. According to the latest labour survey from 2004/05,21 many Mozambicans supplemented their income with secondary economic activities. Many had secondary activities (8.7%), with the highest among rural men (15%). Most were selfemployed without employers (75%), and secondary activities were most common in the sectors of agriculture (37%), trade & retail (30%) and the manufacturing industry (21%). The overwhelming reason given (90%) for secondary activities,wasthatitprovidedextraneededincome. A 2009 ILO survey of reported working conditions for urbanworkers,withthebreakdownbelow.Thesurvey shows that work is often in unsafe environments, many work either few or many hours, and many are not aware of their rights or the safety risks of their work.23 A comparable survey was carried out in Tanzania, and working conditions and awareness are eithersimilarorbetterinMozambique.22

15%

26% GlobalWage 20 Report

15%

32%

% of minimum wage to value added per worker denotes the minimum wage share of labour productivity. Reported as ratio of minimum wage to value added per worker in the Doing Business 19 Report. TheWageShareistheshareofGDPthatgoestowagesandother forms of labour compensation. It is not adjusted for the self employed, and can therefore underestimate the amount of GDP that goes to workers, if there are many selfemployed in the 20 economy.

Workingconditions (2009)23

Mozambique has nine minimum wages in different industries,withthehighestmonthlyminimumwagein Financial Services at 6,171 metical, and the lowest in Agriculture at 2,300 metical. The manufacturing industry had a minimum wage of 3,585 metical per month,andhadseenarealminimumwageincreaseof 44% since 2008.18 The minimum wage is usually raised everyyearatthe1stofMay. AccordingtotheU.S.AnnualHumanRightsReport,17a minimal liveable wage required to provide for a family of five was around $268, somewhat below the mandated minimum wage. Many employers are reported not to implement the new minimum wages. Health and environmental laws exists to protect workers, but these laws were not always enforced. There were significant violations of labour laws in severalcompaniesandindustries. The wage share of labour is medium for the Sub Saharan region. At 26% it ranks 7 out of 17 Sub Saharancountries.

Physicalworkenvironmentandrisks Physicalhazards(%ofworkerswhoareexposedtothefollowing hazardsaround3/4ofthetimeormore) Noises 27% Hightemperatures 18% Smoke,fumes,dust 31% Dangerouspeople(thieves,poachers 18% andsoon) Beingwellinformedofsafetyrisks 44% Workandhealth Workaffectsyourhealth Absentduetohealthproblems (%,overthepast12months) Awarenessoflegalentitlements Minimumwage WorkingTime Maternityprotection Weeklyworkinghours Shorthours(lessthan30hours) Longhours(morethan50hours) 22% 59% 64% 59% 71% 32% 18%

Workforce
Employmentrates3 (2011),AgeandSexdistribution
Sex Male& female Male Age Total Youth Adult Total Youth Adult Total Youth Adult 15+ 1524 25+ 15+ 1524 25+ 15+ 1524 25+ Employment rate 79% 59% 90% 78% 54% 91% 81% 64% 89%
25+

1524

15+

Female

0%

10%

20%

30%

40%

50%

60% Female

70% Male

80%

90%

100%

Maleandfemale

Men and women have the same employment rates, though women have a slightly lower rate than men at age 25+ and a higher rate in their youth. The lower employment rates for men in their youth would usually imply that young men are being prioritised for education and therefore not active on the labour market. Though women have lower education levels, their enrolment into schools is only slightly lower than men. Youth unemployment rates are also lower for men, so the difference is not because of more men beingunemployment. That women age 15+ have higher employment rates than men is unusual for most economies, and indicates that women are very active participants on theMozambicanlabourmarket. Mozambique has considerably more working poor than the SubSaharan average. Consistent with its many working poor Mozambique had a small middle class, with only 7% living for $24 a day and 2.6% for $420 a day, compared to SubSaharan Africa where 14%livedfor$24adayand10%for$420aday.24 Mozambique has experienced years of high growth anditisexpectedtoincrease,duetonewcoalandgas extraction. However, the growth has largely been in extractive industries, which create few jobs compared to investment. As example, the Benga coal mine has an investment of 13.6% of Mozambiques GDP, but has onlycreated 150direct jobs anda projected4,500 jobs.25 WorkingPoor3 Age15+
Region Shareofworkers intotalemployment 1.25USD aday 58% 2USD aday 81%

Mozambique(2008)

SubSaharan 45% 68% Africa(2008) SubSaharan 44% 67% Africa(2011) Workingpoormeasuresemployedpeoplelivingforlessthan US$1.25andUS$2aday,asproportionoftotalemployment inthatgroup

Unemploymentandunderemployment Somewhat outdated information exists on unemployment and underemployment from a labour force survey of 2004/05. The unemployment rate was rather high at 19%. Unemployment was more common in urban areas, and in particular among the youth. Women were more likely to be unemployed than men, both in general and the youth. The unemployment number is very high considering the general poverty and lack of social protection in Mozambique, and likely covers persons, who have somemeanofsupport. The concept of underemployment does sometimes also include those who are employed below their skill level, whereas the measure for Mozambique is confinedtotimerelatedunderemployment,indicating those who involuntarily worked less than40 hours per week. Underemployment was more common in rural areas, because many rural men are underemployed, likely becauseofseasonalchangesinactivity. The survey also showed that underemployed women tend to be in urban areas, whereas underemployed men tend to be in rural areas. Underemployment is about the same level for youth as for the total labour force. Urban youth unemployment is a large problem. As with most other African countries, the formal sector produces grows to slow to absorb the estimated Sectoralemployment Employment(2003)3&GDPshare(2010)26 Sector&Sexdistribution(GraphwithoutAgriculture)
Sector Miningandquarrying Manufacturing Electricity,gasandwater Construction Trade,restaurantsand hotels Transportand communication Finance,realestateand businessservices Publicadministration, education&health Otherservices Agriculture Male employment 37,200 54,793 0 161,508 332,755 75,730 265,744 186,221 N/A 2,507,329 Female employment 4,600 5,574 0 4,975 225,219 3,059 133,191 58,765 N/A 3,881,815 GDPshare persector 1.5% 13.2% 4.7% 3.1% 17.9% 10.1% 7.0% 4.0% 7.6% 30.9%
0 Male 400,000 Female 800,000 GDPsharebySector 1,200,000 0% 5% 10% 15%

300,000 young people entering the labour market eachyear,andmanythereforeendupinprecariousor informaljobs.26 Interpretation of the open unemployment and employment rates as indicators of a wellfunctioning labour market is problematic in developing countries. When unemployment is not an option where a person can survive, work of some sort has to be found, often casual and informal work. Unemployment should therefore be understood in relation to the strength of social safety nets, the prevalence of informal employment and how much of informal employment is underemployment due to few formal employment possibilities.27
Unemployment,youthunemployment andunderemployment21 (2004/05)
Un employment 19% 31% 13% 15% 22% Youth Unemployment age (1519)(2024) 37%27% 57%45% 26%17% 37%23% 37%30% Under employment 13% 10% 14% 17% 8%

Total Urban Rural Male Female

10

Agriculture is by far the single largest employment sector in Mozambique, employing around 80% of the labour force, though only contributing with 31% of GDP. The large difference between people employed in agriculture and the contribution to GPD is reflected in other sectors, where there is a much higher contribution to GDP compared to workers in the sectors. It is far more common for women to be working in agriculture(90%)thanmen(70%).Outsideagriculture, women find employment in trade, business services and public administration. All of these sectors have moremenemployed. Unlike most other African countries, the GDP share of agricultural is growing at the expense of especially the service sector. Cereal yields have increased steadily since a low in 2005,50 though agricultural yields are otherwise reported to have been stagnant in the last decade and 95% of agricultural workers work on small plots with little technology or access to extension services.28
SectorsShareofGDP50
60% 50% 40% 30% 20% 10% 0% Services Industry Agriculture

Migration At 1.2% of GDP, Mozambique receives about half of the amount of remittances than the Sub Saharan average. Considerably fewer people also migrate out of Mozambique at a rate of 1 out of every 5,584 inhabitants, however years of high growth has also attracted many migrants, which are deducted in the netmigration. The top three destinations for migrants are South Africa,MalawiandZimbabwe.29 The high growth rates and shortages of skilled domestic labour have also created a demand for skilled foreign labour. With a certain historical irony, many unemployed Portuguese have moved to Mozambiquetofindjobsinthelastcoupleofyears.30 11,821 foreign nationals applied for work registration in the first nine month of 2012, and 11,000 in the sameperiodin2011.31 Migration50
Netmigration (20062010) Netmigrationto averagepopulation peryear(20062010) Personaltransfersi.e. remittancesreceived, %ofGDP(2011) Mozambique Mozambique SubSaharan Africa Mozambique SubSaharan Africa 20,000 1:5,584 inhabitants 1:2,048 inhabitants 1.2% 2.6%

11

InformalEconomy The Friederich Ebert Stiftung estimates that only 5.1% of the total labour force is in formal employment.5 Most informal employment is in subsistence farming, which is a large sector as agricultural employment constitute 80% of total employment and self employed constitute 91%. Outside agriculture the informal sector is still the largest employer, and it grows at a rate of 7%8% per year.4 This is largely because the formal sector produces too few jobs to absorb the estimated 300,000 young people entering ChildLabour Child labour is common in Mozambique and at 22% it isslightlylowerthaninSubSaharanAfrica. Child labour is higher in rural (25%) areas than urban (15%). Girls (24%) were slightly more likely than boys (21%) to be engaged in child labour. Older children at the age 1214 (27%), were also more likely to be engaged in child labour than younger at the age 511 (21%). The HIV/AIDS pandemic is a major cause of child labour in Mozambique, as children who have lost one or both of their parents are more likely to be engaged inchildlabour.32 Workingchildren Proportionofallchildreninagegroup
Region Mozambique (age514) SubSaharan 34 Africa (age517)
33

the labour market each year, who therefore end up in informal jobs. The formal sector is estimated to be onlyabout700,000jobs. ASSOTSI is an informal workers association, which again is associated to OTMCS. With around 60,000 members, it is the largest single organisation associated to OTMCS. ASSOTSI is not an affiliated organisation of OTMCS like regular trade unions, but is in the process of becoming one, and it receives technicalsupportfromOTMCS.4

Year 2008

Type Childlabourers Childrenin employment Childlabourers Hazardouswork

Proportion 22.2% 28% 25.4% 12.7%

2008

Childreninemploymentincludesallchildrenwhoconductsome kindofwork,whereaschildlabourersisanarrowerterm withoutmildformsofwork.Hazardousworkistheworstfrom ofchildlabourasdefinedinILOC182.

Gender As noted elsewhere in this report: Fewer girls enrol in schools than boys, especially in tertiary education, but the gender differences are smaller than the Sub Saharan average. Women have less education than men, though Mozambique has the lowest education level in the world. Slightly more girls are engaged in child labour than boys. Women have higher rates of employment than men, because more young women participate on the labour market. It is far more common for women than men to be working in agriculture. Women have higher rates of unemployment,youthunemployment,butlowerrates of underemployment, because many rural men are underemployed. An Enterprise Survey from the World Bank in 2007 reported that 14% of full time employees were women,lessthantheSubSaharanaverageat21%.35

12

Characteristics of the Working Age Population

Highestlevelattainedandyearsofschoolinginthepopulation36 (2010),Population25+,TotalandFemale
HighestLevelAttained
NoSchooling Primary Secondary Tertiary Begun Completed Begun Completed Begun Completed

Total
74.5% 9.2% 12.6% 1.5% 1.6% 0.2% 0.3% 1.2years 0.80

Female
83.3% 6.4% 8.6% 0.5% 0.7% 0.1% 0.2% 0.7years 0.87
Total

Female

Averageyearoftotalschooling EducationalGiniCoefficient

0% 20% NoSchooling Secondary Begun Tertiary Completed

40% 60% Primary Begun Secondary Completed

80% 100% Primary Completed Tertiary Begun

Primary, secondary and tertiary is the internationally defined distinctionof education. In Denmark these corresponds to grundskole, gymnasium & university. The educational Gini Coefficient is similar to the Gini Coefficient, but instead of measuring the distribution of income in a population, it measures 37 thedistributionofeducationmeasuredasyearsofschoolingamongthepopulation.

With only 1.2 years, Mozambique has the lowest of average schooling per capita in the world. It is in stark contrast to neighbouring countries such as Zimbabwe and Zambia, with averages of 7.3 years and 6.7 years respectively. Of those who have education, most have howevercompletedprimaryeducation. Undoubtedly,the 15year longcivil war which in1992, and later political conflict between the FRELIMO and RENAMO parties has been a deterrent on enrolling into education. However even for a conflict affected the country, the education level is very low. The civil war did destroy vital infrastructure including schools, but a lot of Mozambicans also have no schooling because the Portuguese rule actively prevented schooling and therefore empowerment of the local population. Women are underrepresented in all types of education, having less total schooling and a more unequal distribution of the education among women. The graph above shows the educational attainment of all Mozambican above 25 years, therefore gives a glanceofthehumancapitalofthelabourforce.

EnrolmentinPrimary,SecondaryandTertiaryschools(20002011)50 TotalandFemale,MozambiqueandSubSaharanAfrica
Netprimaryschoolenrolment
100% 90% 80% 70% 60% 50% 40% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 50% 40% 30% 4%

Netsecondaryschoolenrolment
8% 6%

Grosstertiaryschoolenrolment
Mozambique, Total enrolment Mozambique, Female enrolment SSA,Total enrolment SSA,Female enrolment

Net enrolment is the ratio of children of official school age, who are enrolled in school to the population of the corresponding official school age. Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Gross primary enrolmentisthereforesometimeshigherthan100%.

13

Enrolment rates into primary education is higher than SubSaharan Africa, as primary schools have are free andcompulsory,thoughregistrationfeesarerequired. Enrolment into both secondary and tertiary education is much lower in Mozambique than other Sub Saharan African Countries, though no recent data exists for enrolment into universities. Only around 92% of students in secondary schools completed their education in 2008, limiting their skills at the labour market skills. Dropouts were mainly due to financial constraints.38 According to the African Development Bank,26 the low skills level of the labour force remains a significant issue both for employers who are unable to engage qualified labourers as well as for promoting a culture of entrepreneurship. The low education level has led some foreign companies to import labour, and the government has therefore set a quota on number of foreignworkersperenterprise. Domestic skilled labour is especially scarce in the boomingextractiveindustries.39 Though still lower than the SubSaharan average and with a too small output and outdated training

materials, vocational education and training is comparable better in Mozambique. UNESCO data record 34,176 pupils enrolling in vocational training in 2011,40 whereas The African Development Bank reports that the national Vocational Training Institute (IEFP)isturningout156,000peryear.26 A National Authority for Professional Education (PIREP) is planned. It will establish professional education centres in the provinces, and will be supported by a new Professional Education fund financed through a 1% tax on private sector wages.26 Theprocessisstillongoing,howevertherearetraining schools for the public sector, which are using the modeldesignedbyPIREP
VocationalTraining50
Pupilsinvocationaltraining (2011) Ratioofpupilsinvocational studenttoallpupilsin secondaryeducation (Average20062010) Ratioofpupilsin vocationaltrainingoutof 1524yearolds (Average20062010) Mozambique Mozambique SubSaharan Africa Mozambique SubSaharan Africa 34,176 6% 7.4% 0.7% 1.8%

14

Social Protection
AllworkersareentitledtosocialsecurityintheLabour Law.13 SocialprotectioninMozambiquehasthreelevels:41 Compulsory social insurance is for formal private and public workers giving sickness allowance, relocation allowance, oldage pension, disability pension, survivors pension, funeral benefit and maternity allowance. About 2% of the workforce is covered by thisscheme. Complementary social security is optional higher pensions for workers in the compulsory social insurance. Noncontributory Basic Social Security is transfers and welfare services to the most vulnerable. It involves two assistance programmes, a food subsidy programme to the elderly, ill or disabled, and direct support programme to those who require immediate assistance. In 2011, 252,842 households benefitted from the food subsidy programme. In 2012, the food subsidyprogramme(PS)wasreplacedbyaBasicSocial Subsidy Programme (PSSB) for households with no adults able to work, and a public works programme, for households with an adult able to work. Benefits are to more than double to about 239 Metical per month ($8).42 Three development schemes are also part of the basic social security. These are a micro credit scheme, with 5,000 beneficiaries in 2007, a labour market integration scheme with 3,000 beneficiaries in 2007 and a region support scheme, whichsupported280communitiesin2007. Few social protection mechanisms exist for the informal and selfemployed workers, which are small familyorcommunityrunschemes.However,thesocial security law of 2007 aims to extend the compulsory social insurance system to selfemployed workers.14 The social security system is therefore open for informal or selfemployed workers. There is an addendum to the law of social security which entitles these workers to be part of the system. However, the

system is not yet well organised and therefore many of the people from the informal sector are not registered. The Instituto Nacional de Segurana Social (INSS), which runs the compulsory scheme has been rocked by scandals of corruption. At least USD 8 million disappearing between 2002 and 2008,43 in 2012 the labour minister freezed INSS bank accounts,44 and the General Manager and the chairperson of INSS was fired for corruption,45 Both OTMCS and CTA has calledforINSSreform.46 The ILO convention 183 on maternity leave protection has not been ratified. Following the labour law maternity leave is set at 60 days fully paid, as of 2007 the compulsory social insurance finances the benefits, accordingtothelawonsocialprotection.47
Publicspendingonsocialprotectionschemes (2006)
2006Metical Publicsocial protection expenditure, excl.health 2011USD %ofGDP percapita perworker ofgovernmentrevenue Publichealth expenditure %ofGDP
48 48

1.26billions 55millions 0.7% $2.6 $5.5 2.6% 3.3%

Coverageofcontributoryschemestopotential demographic49 Contributorstoscheme(2008)

Lifeinsurance Disability Oldagepension Oldagepensionrecipientratio65+ 2.1% 2.1% 2.1% 15.4%

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General Economic Performance

KeyFacts (2011)
GDP 12.8 billion USD
50

GDP 50 percapita (PPP) 982 USD 192of201 countries

GNI 12.8 billion USD

50

Human Development 51 Index 0.322 184of187 countries

Gini Coefficient 50 (2008) 0.46 116 of156 countries RuleofLaw

53

ranking means the regulatory environment is more conducivetothestartupandoperationofalocalfirm. Mozambique scores high on starting a business and protecting investors, but very low on getting electricity.Mozambiquealsohasmediumtolowranks on the three Governance indicators, with a slightly betterControlofCorruption.
GDPperCapita(PPP),trendandforecast
3000 2500 CurrentUSD 2000 1500 1000 500 0 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
56

Doing 52 business 139of183 countries

Controlof 53 corruption 0.41 124of212 countries

Government 53 effectiveness 0.55 137of212 countries

0.56 142 of212 countries

Mozambique is experiencing a boom in economic growth. Growth had for long averaged 9%, the financial crisis only decreased it to 6.3% in 2009, and growthwasbackat7.5%in2012.54 The long periods of growth has not been matched by jobcreationorreductioninpoverty.WithaGDPinper capita measured in Purchasing Power Parity at $982, Mozambique is a very poor country, and Mozambique is projected to stay behind the SubSaharan average for years. Mozambique also has one of the lowest ranksintheworldontheHumanDevelopmentIndex. FRELIMO, the former Marxist liberation movement partyturnedtowardsmarketeconomy,dominatesthe political landscape. RENAMO, the former rebel army turned into a conservative political party, called supporters back to their old military base in 2012. Chief among RENAMOs complains is that the newfound wealth is kept among the elite of FRELIMO.55 Inflation has been high for many years, but is projected to fall, and was indicated to be as low as 1.2%inSeptember2012.54 Inequality is increasing in Mozambique due to the increased growth. The Gini coefficient ranks Mozambique at a medium to lower end at 116 out of 156countries. The doing business indicator ranks Mozambique medium to low at 139 out of 183 countries. A high

Mozambique

SubSaharanAfrica(excl.SouthAfrica)
56

Inflation,trendandforecast
20%

15%

10%

5%

0% 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Mozambique SubSaharanAfrica
50

Grossfixedcapitalformation(%ofGDP)
35% 30% 25% 20% 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

2010

2011

Mozambique

SubSaharanAfrica

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Trade
With an export of 22% and import of 34% of GDP, trade plays a medium role in Mozambiques economy. Exports are dominated by aluminium coming from the Mozal smelter plant. The Mozal aluminium smelter was build in the late 1990s, and to attract foreign investment large tax exemptions were given to the investors. According to a report by three environment, 57 dept relief and tax NGOs, the tax exemptions mean that of every $1 being paid to the government from the plant, an estimated $21 leaves the country. Coal extraction has begun in the Tete province and is expected to grow substantially in the coming years, as it is the largest untapped coal reserves in the world. Newly discovered gas reserves are further expected to boost exports. When extraction reaches its full potential in 2018, an estimated 50 million liquid natural gas could be produced, which in the long term 58 could almost double Mozambiques GDP. However there is no guarantee that the increased income will benefit the wider public, as corruption is already common in Mozambique, many other African countries have experienced similar resource bonanzas with wealth benefitting the few, and the extractive industries are capital intensive industries which create 25 few jobs compared to their investment. Trade agreements Mozambique is in the 2000 Cotonou Agreement on development cooperation between EU and African, Caribbean and Pacific (ACP) countries, which reaffirms commitment to ILOs Fundamental Conventions and includes provisions on cooperation on various labour 59 and social issues. Since 2000, Mozambique has benefitted from the United States African Growth and Opportunity Act (AGOA), which is a Generalised System of Preferences. It allows duty and quota free access for some products. Mozambique can be removed from AGOA, if the United States deems that Mozambique among other human rights issues do not seek to uphold the ILO Core Labour Standards and have acceptable minimum wages, hours of work and occupational 60 safety and health.
Animal products Mineral products Leather & Furs Wood products Machinery / Electrical Services Vegetable products Chemicals, etc. Textiles Stone / Glass Transportation Foodstuff Plastics / Rubbers Footwear Metals Miscellaneous
64

Export Processing Zones Due to the tax exemptions for the Mozal plant, it is similar to an export processing zone. According to ITUC, violations of collective bargaining agreements and anti-union discrimination occur. The right to strike is further undermined as work in the export processing zone is classified as an essential service, subject to compulsory arbitration in disputes. ILO only classifies groups such as hospital personnel, police, military etc, as essential services.
Trade and Foreign Direct Investment
Exports 61 (2011) 2.8 billion USD 22 % of GDP Imports61 (2011) 4.2 billion USD 34 % of GDP FDI flow 62 (average 2006-10) 1 billion USD 8 % of GDP
63

FDI Stock61 (2011) N/A

Products share of exports (2010)

Mozambique's main export markets (2010)

Zimbabwe; 3% China; 3% Others; 11%

South Africa; 20% EU; 63%

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References

Club of Mozambique, Mozambique expels 60 illegal workers from China, 22 June 2012 Club of Mozambique, Labour Minister reverses decision on "Maeva Case", 22 June 2012 3 ILO, Key Indicators of the Labour Market Database 4 LO/FTF Council 5 FES, South Africa Office, Trade Unions in Sub-Saharan Africa, 2012 6 ITUC, Trade Union Development Projects Directory 7 http://www.cta.org.mz/ 8 Club of Mozambique, Labour mediation centres operational by 2012, 30 May 2011 9 OTM-CS 10 Club of Mozambique, CCT Calls for Constitutional Amendment, 9 November 2012 11 ILO, NATLEX, Decreto nm 7/94 de 9 de marzo, por el que se crea la Comisin Consultiva del Trabajo 12 ILO, NATLEX, Constitucin de la Repblica de Mozambique 13 ILO, NATLEX, Ley nm. 23/2007 del Trabajo 14 ILO, NATLEX, Country Profile Mozambique, Basic Laws 15 ILO, NORMLEX, Country Profiles 16 ITUC, Annual Survey of violations of Trade Union Rights, 2012 17 U.S. Department of State, Annual Country Reports on Human Rights Practices, 2011 18 Club of Mozambique, Government approves new minimum wages, 19 April 2012 19 th IFC, World Bank, Doing Business 2013, 10 ed. 20 ILO, Global Wage Report 2012/13 21 Instituto Nacional de Estatstica, Inqurito Integrado Fora de Trabalho (IFTRAB 2004/05), 2006 22 ILO, TRAVAIL, National Profile of Working Conditions in Tanzania, 2009 23 ILO, TRAVAIL, National Profile of Working Conditions in Mozambique, 2009 24 African Development Bank, The Middle of the Pyramid: Dynamics of the Middle Class in Africa, April 2010 25 World Bank, World Development Report, Jobs, 2013, p. 200 26 AfDB, African Economic Outlook, Mozambique Country Note, 2012 27 Kucera D. & Roncolato L. (2008), Informal Employment: Two contested policy issues, International Labour Review, Vol. 147 (2008). No. 4 28 World Bank, World Development Report, Jobs, 2013, p. 191 29 World Bank, Migration and Remittances Factbook 2011 30 The Guardian, Portugal's migrants hope for new life in old African colony, 22 December 2011 31 Club of Mozambique, Number of Foreign Workers Increases Slightly, 8 November 2012 32 ILO, NORMLEX, Observation (CEACR) - adopted 2011, published 101st ILC session (2012), Worst Forms of Child Labour Convention, 1999 (No. 182) - Mozambique (Ratification: 2003) 33 UNICEF, Mozambique Multiple Indicator Cluster Survey 2008 34 th ILO, Accelerating action against child labour, International Labour Conference, 99 Session 2010 35 World Bank, Mozambique Enterprise Survey, 2007 36 Barro, Robert and Jong-Wha Lee, April 2010, "A New Data Set of Educational Attainment in the World, 19502010." NBER Working Paper No. 15902 37 Calculation from based on Thomas, Wang & Fan (2001), with data sets fromBarro-Lee (2010) and Psacharopoulos and Arriagada (1986). 38 Nuffic, Alignment of higher professional education with the needs of the local labour market: The case of Mozambique, 2011 39 Club of Mozambique, Natural resources need skilled labour, 8 November 2012 40 UNESCO, Institute of Statistics 41 Centro de Informao em Proteo Social, Moambique 42 ILO, GESS, Social Protection Floor in Mozambique, Summary, 8 September 2011
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43 44

allAfrica, Mozambique: INSS Must Defend Contributors and Beneficiaries, 18 February 2010 Club of Mozambique, Labour Minister freezes INSS bank accounts, 20 June 2012 45 Club of Mozambique, Prime Minister sacks INSS chairperson, 13 August 2012 46 Club of Mozambique, Union and Employers call for INSS reform, 7 August 2012 47 ILO, TRAVAIL, legal database, 2011 48 ILO, GESS, World Social Security Report, 2010/2011 49 ILO, Social Security Department, Social Security Inquiry 50 World Bank World dataBank 51 Human Development Report, Global Report, Statistical Annex, 2011 52 World Bank, Ease of Doing Business Index 53 World Bank, Worldwide Governance Indicators 54 World Bank, Mozambique Overview 55 The Southern Times, Dhlakama back in the bush, 29 Oktober 2012 56 IMF, World Economic Outlook Databases 57 Friends of the earth, Jubilee Dept Campaign, Tax Justice Network, Whose development is it?, Investigating the Mozal aluminium smelter in Mozambique, 2012 58 Weekendavisen, Hede drmme om gas og kul, 11. januar 2013 59 Ebert & Posthuma, ILO, IILS, 2011, Labour provisions in trade agreements: current trends and provisions 60 http://www.agoa.gov 61 CIA, World Fact Book, 2011 62 World Bank World dataBank 63 MIT, Alexander Simoes, The Observatory of Economic complexity, What does Mozambique Export? 64 European Commission, DG TRADE, Bilateral Relations, Statistics

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