Africa Coronavirus Economy Government Mozambique

Mozambique should introduce emergency unemployment subsidy – researcher

Researcher Ruth Castel-Branco, from Mozambique’s Institute of Social and Economic Studies (IESE), is proposing the introduction of a state of emergency unemployment subsidy in the country, in the wake of the Covid-19 pandemic.

“The National Institute of Social Security (INSS) should consider introducing a state of emergency unemployment subsidy,” she says in a text on the subject published on the institute’s website.

The subsidy “would be paid to all beneficiaries registered in the subsystem, regardless of their contribution history, until the company [in which they work, subject to slowdown] resumes its normal activity”.

Informal workers already registered with the INSS “would also be entitled to this subsidy”, she adds.

The proposal comes after the Confederation of Economic Associations of Mozambique (CTA), the main employer association in the country, announced that the Mozambican business sector is facing huge losses as a result of the restrictions and economic slowdown caused by the new coronavirus.

The CTA has proposed, among other measures, the possibility of suspending employment contracts with salaries being paid by the State with the support of donors.

Ruth Castel-Branco classifies the proposal as “very daring”.

The current crisis can lead to an “increase in poverty and inequality, through austerity measures, liberalisation of the labour market, proliferation of tax exemptions for megaprojects, etc. But it can also result in the expansion of the state’s redistributive function, through socialisation of basic social services, the expansion of the social protection system, the reorientation of production processes”, she says.

In addition to a state of emergency unemployment benefit, the researcher further advise that the National Social Action Institute (INAS) should consider “expanding the coverage of its programmes to all candidates on the waiting list, and increasing subsidies over the next six months”.

The measure would serve to compensate households for loss of income.

The researcher stresses that 88% of the economically active population in Mozambique are informal workers, who do not enjoy labour or social protection – and even among workers with a formal situation, a significant part are not enrolled in the mandatory social security system.

For informal workers who are not registered with the INSS or INAS, “a short-term option would be the introduction of a universal basic income in the urban and suburban areas and, later, their integration in INAS”, Castel-Branco suggests.

Despite it being “incipient”, Castel-Branco notes that, “luckily, Mozambique has a social protection system” and “there is an administrative structure to channel funds quickly to poor and vulnerable families”.

“Both formal and informal workers must be considered frontline workers and protected as such,” she concludes.

In addition to being part of the IESE team, Ruth Castel-Branco is part of the Southern Centre for Inequality Studies at the University of Witwatersrand, in Johannesburg, South Africa.

The number of officially registered coronavirus infection cases in Mozambique has risen to 21, with no record of deaths.

The country is in a state of emergency for the month of April, with entertainment and leisure facilities closed and a prohibition on all types of events and meetings. Schools are closed and the issuing of entry visas has been suspended.

Source: Lusa via Club of Mozambique

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