The International Monetary Fund (IMF) denied last Friday that it is forcing Mozambique to reduce its wage bill by 17% by 2026.

The African Director of the IMF, Abebe Selassie, told a press conference that a new aid package for Mozambique is expected to be approved by the IMF board, but added that he was unaware of any plan to force Mozambique to adopt a reduction in the civil service wage bill.

In May of this year the IMF board approved a $456 million credit extension program (Extended Credit Facillity ECF).

In September the IMF and the Mozambican authorities "reached an agreement on policies that could support executive approval of the first program review under the ECF and lead to the first delivery of some $63.8 million," said an IMF statement quoted by VOA.

A memorandum from the Mozambican government itself said, however, that the government will establish public sector employment and compensation reforms aimed at "bringing the wage bill to around 10.8% of GDP by 2026."

The Mozambican government says in that memorandum that it plans to replace "only one in every 3 employees leaving the civil service, except in the education, health, justice, and agriculture sectors."

The Carta de Moçambique portal said that under this plan "the total public service wage bill is to be cut by 17% by 2026, a cut of US$ 425 million per year."

Asked if there were plans within the IMF program to reduce civil service salaries in 17% Selassie replied, "It is not to my knowledge."

"There is a program that will be approved, but to my knowledge it does not contain wage cuts," he added.