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Mozambique: MSMEs face structural challenges to their growth
12:39 CAT | 07 Mar 2025
FILE - For illustration purposes only. [File photo: Major Training]
Micro, small and medium-sized enterprises (MSMEs) in the manufacturing sector in Mozambique continue to struggle to survive, but without achieving real growth, due to the current political, economic and social situation.
The conclusion is set out in the Manufacturing Industries Survey (IIM) for the year 2022 presented a few days ago, which reveals that the country’s manufacturing sector faces structural challenges that impede innovation, expansion and job creation, essential factors for economic transformation, the improvement of living conditions and the elimination of poverty.
“A key finding of the research is that manufacturing MSMEs in Mozambique are surviving but not thriving,” says the paper, which strives to detail the development of micro, small and medium-sized enterprises in the manufacturing sector.
It states mentions that, over time, the lack of structure in the manufacturing sector makes its growth unlikely and vitiates the possibility of hiring in greater numbers.
In the sector, 75% of companies are micro, hiring up to 10 employees, and around 20% percent are small, with the capacity to hire 10-50 employees, while 5% are medium-sized, hiring 51-300, and mostly concentrated in the city and province of Maputo.
The report highlights that the lack of structure and technological progress has kept the manufacturing sector stagnant since 2012, without significant changes over the years, a factor that could jeopardize the manufacturing sector’s contribution to transforming the economy and generating jobs.
The same document reveals that, over the last 10 years, Mozambique has seen a drastic reduction in the size of its companies, with micro-enterprises increasing from 66% to 75% of the total, and the opposite movement being noted in small and medium-sized companies.
The decline has accelerated since 2017, a critical period when half of companies recorded significant asset write-downs.
The provinces of Gaza and Maputo were the most affected, with the food processing and carpentry sectors being particularly severely impacted.
According to the research, the decrease not only saw companies shrinking, but also rising informality in the sector, making compliance with formal operating standards more problematic. “Currently, the number of companies that fully meet the formality criteria is decreasing, deepening the economic and regulatory challenges in the country,” the study reports.
One encouraging fact that the study reveals is that companies led by women perform better
than those led by men. Another factors highlighted has to do with the level of education.
“The study shows that women who own or manage medium-sized companies have, on
average, higher levels of education than men, which can contribute to more efficient and
productive management,” the document concludes.
Source: AIM
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