MSMEs in Mozambique’s manufacturing sector are grappling with significant structural challenges that impede growth, according to the 2022 Manufacturing Industries Survey. The lack of innovation and technology has resulted in stagnation since 2012, with a rise in micro-enterprises and a decline in larger firms. Increased informality complicates compliance with operational standards, while women-led companies demonstrate better performance due to higher educational levels.
In Mozambique, micro, small and medium-sized enterprises (MSMEs) in the manufacturing sector are encountering substantial challenges that hinder their growth. According to the recent Manufacturing Industries Survey (IIM) for 2022, these enterprises are surviving rather than thriving amidst the current political, economic, and social climate, which obstructs innovation, expansion, and job creation, all vital for economic transformation and poverty alleviation.
The survey highlights the structural inadequacies within the manufacturing sector that lead to stagnation, deeming significant growth and increased employment as unlikely. Currently, 75% of manufacturing companies are classified as micro, employing up to 10 workers, 20% are small with 10-50 employees, and 5% are medium-sized, hiring between 51-300, predominantly situated in Maputo.
It has been observed that the manufacturing sector has not experienced notable changes since 2012, contributing to its stagnation. This stagnation threatens the sector’s potential to aid economic transformation and job creation. Notably, over the past decade, there has been a marked decrease in company sizes, with micro-enterprises increasing from 66% to 75%, while smaller and medium-sized enterprises have declined, especially after 2017, where a significant number experienced asset write-downs.
The provinces of Gaza and Maputo have been particularly affected, with sectors such as food processing and carpentry facing considerable challenges. The research indicates that the reduction in company sizes is closely linked to a rise in informality within the sector, complicating adherence to formal operational standards. The number of firms complying with formal criteria continues to diminish, further exacerbating economic and regulatory obstacles.
Encouragingly, the study reveals that companies led by women tend to perform better compared to those led by men. It also indicates that women managing medium-sized companies generally possess higher levels of education than their male counterparts, which may enhance management efficiency and productivity.
In conclusion, the structural challenges faced by MSMEs in Mozambique’s manufacturing sector hinder their growth and job creation potential. The increase in micro-enterprises and the decline in small and medium-sized firms, along with rising informality, highlights significant economic and regulatory issues. However, the performance of women-led firms and their higher educational attainment offers a promising avenue for improved management and productivity in the sector.
Original Source: clubofmozambique.com
