YouthStart: Youth Economic Opportunity Ecosystem Analysis Country Report on Mozambique

Check out YouthStart report here: ow.ly/WAbsC

YouthStart Global is a global programme funded by UN Capital Development Fund and the Swedish International Development Cooperation Agency (SIDA)


EXECUTIVE SUMMARY

This report is a synthesis of an assessment undertaken on the current landscape of economic opportunities and challenges for youth in Mozambique and the existing interventions to address these issues. In addition to extensive desk research and analysis of youth employment activities, the study involved multiple stakeholder interviews, youth focus groups, and a stakeholder workshop, during a two-week country visit.

CONTEXT

Mozambique’s economy has experienced fast and sustained growth for the last ten years; it is predicted to continue on this strong trajectory. Growth has been driven by a boom in the extractives industry and “mega projects” related to infrastructure. The construction industry is the third fastest growing sector, behind the extractives industry and financial services. The tourism sector is also recording strong growth driven by increased business tourism. The agriculture sector remains the largest employer—generating the majority of employment (>70%)—but accounts for only a third of gross domestic product (GDP). Manufacturing is the largest non-agricultural sector of the economy but it is not growing rapidly or creating a significant number of jobs.

This economic growth has not resulted in commensurate growth in formal or informal sector jobs. The youth labor force is increasing by almost 40% per annum but the rate at which new formal sector jobs are created remains static. In addition, there are significant challenges to entrepreneurship that exacerbate the demand constraints of the labor market. Youth unemployment varies by geographic location with roughly 8% unemployment in rural areas and 36% in urban areas, but these figures mask a high underemployment rate (80%). Young women suffer from the highest level of unemployment, a situation reinforced by their underrepresentation in socioeconomic and political structures.

 

To address this growing urban ‘youth bulge,’ the government has instituted the National Development Policy (ENDE) and the National Youth Policy (NYP). ENDE places emphasis on developing the agriculture, fisheries, industrial diversification, infrastructure, extractive industry, and tourism sectors; it is aimed at stimulating overall economic growth, and thus indirectly benefits youth. The NYP focuses on expanding economic opportunities for youth through employment and entrepreneurship and as well as mainstreaming youth issues into government plans and policies. The NYP has been in place as a policy guideline since 2013; the Ministry of Youth is beginning to develop an implementation plan.

There are a number of programmes, across different sectors, working to expand economic opportunities for youth in Mozambique. There are currently less than 30 programs explicitly targeting youth, with the majority focused on expanding economic and employment opportunities in general. The current programs are primarily led by public and non-profit organizations, operating at regional levels and offering supply side interventions which concentrate on improving the employability of labour supply.

Despite this progress there is a need for more interventions and rapid actions in order to limit the negative impact of disempowerment on the youth population, and the negative impacts of youth unemployment on Mozambican society. Youth unemployment represents a sizeable economic loss stemming from unrealized human resources, foregone potential income tax revenues, and a loss of returns on government investment in education—all contributing to creating a heavy tax burden in future years. In addition, protracted joblessness increases youth disenfranchisement, which can lead to increased social unrest, political instability, and crime while increasing youth’s vulnerability to poverty.

Check out full YouthStart report here: ow.ly/WAbsC

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