Maputo - The Mozambican government on Tuesday caved in to unions threatening a general strike, agreeing in last-minute negotiations to a 26 percent increase in the minimum wage.
The trade union federation (OTM) later called off the strike, which had been set for Wednesday.
"We appeal to all Mozambican workers to go to work, because we finally managed to get an increase that somehow dignifies the workers," said OTM's chairperson Amos Matsinhe.
Trade unionists had announced that the strike would go ahead after the government failed to turn up for talks early on Tuesday.
The general strike was to protest against a 16 percent increase decreed by the government. The minimum wage stands at 450 000 meticais (about R208) a month.
The OTM had demanded an increase of 30 percent.
Matsinhe told the workers not to worry because "we will continue to fight for the remaining four percentage points".
Mozambicans have been urged to tighten their belts since the late 1980s when the International Monetary Fund (IMF) and World Bank began supervising a structural adjustment programme to address the country's economic woes.
The annual growth rate of about 10 percent has yet to benefit the bulk of the population, 70 percent of whom live in absolute poverty.
Inflation, which in 1994 peaked to about 70 percent, has been gradually reined in and now stands at about five percent. However, the cost of living has risen as a result of tight monetary restrictions.
From the time of Mozambique's independence in 1975 up until 10 years ago, OTM was under tight government control, with most of its leaders being members or sympathisers of the ruling Frelimo party.
If its action had gone ahead, it would have been the first general strike called by the union. - Sapa-AFP