The Manufacturing Industries Survey for 2022 outlines the struggles faced by Mozambique’s MSMEs in the manufacturing sector due to political and economic issues. While 75% of firms are micro-sized, there is a concerning trend of shrinking company sizes and increasing informality. The survey also highlights the better performance of women-led enterprises, indicating potential areas for improvement in management and productivity.
Micro, small, and medium-sized enterprises (MSMEs) in Mozambique’s manufacturing sector are facing significant struggles that hinder their growth, as revealed by the recently released Manufacturing Industries Survey (IIM) for 2022. The current political, economic, and social situation presents structural challenges that obstruct innovation, expansion, and job creation, vital components for economic development and poverty alleviation.
The IIM highlights that while manufacturing MSMEs in Mozambique are managing to survive, they are not thriving. The report emphasizes that the magnitude of structural disarray within the manufacturing sector diminishes the likelihood of substantial growth and further complicates the possibility of increased hiring.
According to the report, 75% of companies in this sector are classified as micro, employing up to ten individuals. Approximately 20% are small enterprises, capable of hiring 10 to 50 employees, while a mere 5% are medium-sized companies that employ 51-300 individuals. The majority of these enterprises are located in the city and province of Maputo.
The study reveals stagnation in the manufacturing sector since 2012, attributed to a lack of structural and technological advancements. This stagnation jeopardizes the manufacturing sector’s ability to play a transformative role in the economy and to generate new employment opportunities.
In the last decade, Mozambique experienced a remarkable decline in company sizes, with micro-enterprises increasing from 66% to 75% of the total. Conversely, small and medium-sized enterprises have seen a decrease, a trend that has intensified since 2017 when many companies reported significant asset devaluations. Gaza and Maputo provinces noted substantial impacts, particularly in the food processing and carpentry sectors.
The research indicates that not only are companies shrinking, but there is an escalating trend of informality within the sector, complicating compliance with officially mandated operational standards. The report states, “Currently, the number of companies that fully meet the formality criteria is decreasing, deepening the economic and regulatory challenges in the country.”
Encouragingly, the study found that firms led by women tend to perform better than those managed by men. It suggests that women running medium-sized companies typically possess higher education levels, contributing to more effective and productive management practices.
Overall, while the survey indicates significant structural challenges facing MSMEs, it also identifies areas for potential improvement and the importance of education in enhancing leadership effectiveness, particularly among female entrepreneurs.
In conclusion, MSMEs in Mozambique’s manufacturing sector face critical structural challenges that impede growth and job creation, necessitating urgent attention and reform. The predominance of micro-enterprises and the decline in larger firms highlight the urgent need for innovation and technological advancement. Despite these hurdles, the positive performance of women-led firms suggests pathways for improved management and productivity within the sector. Addressing the issues identified in the Manufacturing Industries Survey is essential for the transformation of Mozambique’s economy.
Original Source: clubofmozambique.com
