MSMEs in Mozambique’s manufacturing sector face structural challenges that hinder growth, as revealed in the 2022 Manufacturing Industries Survey. The dominance of micro-enterprises and a troubling decline in small and medium-sized enterprises underscore the difficulties posed by the economic environment. Despite these challenges, firms led by women show promising performance due to higher educational standards among their leaders.
Micro, small and medium-sized enterprises (MSMEs) in Mozambique’s manufacturing sector are facing significant challenges that hinder their growth and sustainability. This conclusion is derived from the 2022 Manufacturing Industries Survey (IIM), which indicates that the current political, economic, and social climate is detrimental to their development. These enterprises contribute to essential areas such as innovation, job creation, and overall economic transformation, yet they struggle to thrive under existing conditions.
The survey indicates that a considerable majority of the manufacturing MSMEs are micro-sized, accounting for 75% of the total, while small firms comprise 20% and medium enterprises make up 5%. A notable concentration of these businesses is found in the Maputo region. The growth of these enterprises remains unlikely due to a persistent lack of structural organization and technological advancement, resulting in stagnation since 2012.
Data reveals a troubling trend over the past decade, with micro-enterprises increasing from 66% to 75% of all companies, while small and medium-sized firms have seen a decline. This reduction has worsened since 2017, a period marked by substantial asset write-downs among many companies, particularly in the Gaza and Maputo provinces, and especially in the food processing and carpentry sectors.
The growth of informality within the sector exacerbates these challenges, complicating adherence to formal operating standards. The study notes a decrease in the number of businesses meeting full formal criteria, which intensifies the economic and regulatory difficulties faced by MSMEs.
Encouragingly, the research also highlights that firms led by women tend to perform better than those run by men. It also emphasizes educational attainment, noting that women managing medium-sized enterprises typically possess higher levels of education, potentially leading to more effective and productive management practices.
The challenges faced by MSMEs in Mozambique’s manufacturing sector are underpinned by structural deficiencies and a tumultuous economic landscape that stifles growth. While the predominance of micro-sized firms is notable, the decline of small and medium enterprises raises concerns about job creation and economic transformation. Nonetheless, the positive impact of women entrepreneurs showcases the potential for improved management outcomes in the sector, suggesting a pathway toward enhanced productivity.
Original Source: clubofmozambique.com
