‘Skills, manufacturing key to development’
Coordinating investment in youth with strategic interventions in human capital development and economic growth will be essential to leverage the country’s demographic dividend for national transformation, economic experts say.
The recommendations follow concerns that Malawi is not making the best out of its youthful population. People aged between 10 and 35 make up 49.6 percent of the population, according to the 2018 national census, the last year where official data is available.
However, macrotrends show that youth unemployment, defined as the number of young people between the ages of 15 and 24 without work but are available and looking for work, has risen from 6.68 percent in 2019 to 6.83 percent in 2022, the latest year where official data is available.
Over the same period, the unemployment rate for the whole population has risen from 86 basis points from 4.92 percent to 5.11 percent.
Southern and Eastern Parliamentary Caucus chairperson Ben Phiri, lawmaker for Thyolo Central, points to the lack of skills as the main driver of unemployment, especially among the youth.
Underscoring the point, National Planning Commission (NPC) director general Thomas Munthali says national initiatives on developing human capital should be closely aligned to the Malawi 2063, the country’s main growth and development blueprint.
“If we want to invest in mining, then we have to make sure that we are training mining engineers, mining lawyers and so forth,” he explains. “However, the NPC head warns that skills development alone isn’t enough.
“It doesn’t matter if we train these people if the local economy cannot absorb the human capital,” he says. “So, the economy has to grow. And the best way to do that is to promote manufacturing. If we do not invest in manufacturing, then we will keep on exporting raw materials and will forever be poor.”
The consensus is that local economic growth as measured by gross domestic product will have to outpace population growth to improve the economic conditions on the ground. So far, population growth (2.6 percent) has outpaced local economic growth, which has hovered at around two percent in the last three years.
The slow growth has led to a reported failure to absorb the emerging crop of young people. Malawi has just signed a labour export agreement with Israel that would allow local youths to work in Israeli farms. Ironically, Malawi is embarking on several mega-farm projects to boost agricultural production.
The development echoes the sentiment of National Working Group on Trade Policy chairperson Frederick Changaya, who previously highlighted the importance of investing in manufacturing and transitioning out of primary production to create more jobs.
“No country has ever developed from primary production alone. The world’s top economists know this. If we are serious about developing, then there should be a clear plan to focus investment in manufacturing and industrialisation,” he said.
By focusing on skills development aligned with Malawi 2063’s strategic sectors and simultaneously stimulating economic growth, particularly in manufacturing, Malawi can harness its demographic dividend and unlock a future of prosperity.
