Mozambique: Report highlights constraints on youth entrepreneurship

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Mozambique: Report highlights constraints on youth entrepreneurship

8:52 CAT | 07 Mar 2019

Mozambique’s economy faces a growing demand for employment with an estimated 420,000 youngsters entering the job market every year.

According to the National Statistics Institute (INE), over 45 per cent of the country’s population is under the age of 15, whilst a further 33 per cent are aged between 15 and 35 years old. In response, the Mozambican government is implementing a National Employment Policy which has a particular focus on young people and those living in rural areas. This seeks to give access to productive employment opportunities and to contribute to improving regulations concerning employment.

However, the huge numbers of people entering the labour market is a matter of serious concern. In recognition of the scale of the problem, the British government’s Department for International Development (DfID) has published a report on constraints on youth entrepreneurship in Mozambique and identifies potential actions to overcome these barriers.

Entitled “A Diagnostic Assessment on Business Environment Constraints on Youth Entrepreneurship in Mozambique”, it notes that despite Mozambique having an annual growth rate of over seven per cent of Gross Domestic Product over most of the last decade, the formal job market remains static and unable to create enough employment for the 420,000 youngsters coming onto the labour market every year.

The report highlights the particular problem of a lack of access to finance for young entrepreneurs. However, it notes that in 2016 the Central Bank, the Bank of Mozambique, launched its National Financial Inclusion Strategy to expand financial education and literacy as well as extending access to financial products and services to segments of the population without bank accounts.

The assessment also finds that the Mozambican government has made improvements through changes to the country’s regulatory framework via the Business Environment Improvement Strategy. However, it notes that more needs to be done to improve the business environment for young entrepreneurs. Concretely, it recommends that a new entrepreneurship and innovation strategy be implemented within the office of the Prime Minister.

In addition, the report points out that start-up and fledgling youth enterprises need business development services to enable them to create jobs and income. Therefore, it suggests that capacity building support is given to enable commercial business development services to provide appropriate products. The study also concludes that capacity building support should be given to business membership organisations representing youth entrepreneurs.

The study puts an important emphasis on gender-based inequalities in Mozambique which limit women’s employment and business prospects. The report notes that women-owned businesses tend to generate lower levels of income and make less use of technology. Therefore, it highlights the important role of the DfID Muva project on women’s economic empowerment in gathering information on gender-based barriers and tackling these inequalities.

Discussing inclusive growth and the @MUVA_Moz experience of women’s economic empowerment in Mozambique at the @DFID_SocDev conference with @emmelineoxford #Soc_Dev #sda2019 pic.twitter.com/tCDka8SSQ9

— Benjamin Zeitlyn (@bzeitlyn) March 5, 2019