Structural Challenges Facing MSMEs in Mozambique’s Manufacturing Sector

Micro, small, and medium-sized enterprises (MSMEs) in Mozambique’s manufacturing sector are struggling to grow due to ongoing political, economic, and social challenges. The 2022 Manufacturing Industries Survey reveals that while these enterprises are surviving, they face structural issues impeding innovation and job creation. Notably, firms led by women demonstrate higher performance levels compared to their male counterparts.

Micro, small, and medium-sized enterprises (MSMEs) within Mozambique’s manufacturing sector are currently facing significant challenges to their growth, primarily due to the prevailing political, economic, and social climate. The Manufacturing Industries Survey (IIM) for 2022 illustrates that, although these enterprises are surviving, they are failing to achieve substantial growth, which is essential for job creation, innovation, and economic transformation.

The survey highlights that 75% of MSMEs are micro-sized, employing up to 10 individuals, while approximately 20% are categorized as small, hiring between 10 to 50 employees. Only 5% are medium-sized firms, employing up to 300, mainly located in Maputo. The lack of organizational structure and technological advancement has kept the manufacturing sector stagnant since 2012, hindering its potential to contribute towards economic growth and job creation effectively.

Over the past decade, Mozambique has witnessed a notable decrease in the size of its companies, with micro-enterprises increasing from 66% to 75%. Conversely, small and medium enterprises have diminished in number, with a sharp decline since 2017. During this time, a significant number of firms reported substantial asset devaluation, particularly in the provinces of Gaza and Maputo, where the food processing and carpentry sectors have suffered considerably.

The research further indicates a rise in informality among enterprises, complicating adherence to formal operating standards. “Currently, the number of companies that fully meet the formality criteria is decreasing, deepening the economic and regulatory challenges in the country,” the study notes. However, the findings reveal that enterprises managed by women tend to perform better than those led by men, suggesting that higher educational attainment among female managers contributes to more effective and productive management.

In conclusion, the manufacturing MSMEs in Mozambique face structural challenges that hinder their growth and potential for job creation. The prevalent economic difficulties have caused a troubling trend towards increased informality and a significant decline in company sizes. Nonetheless, the data also highlights the comparative success of firms led by women, driven by their higher educational levels, which indicates a pathway for improved management practices in the sector.

Original Source: clubofmozambique.com