Unemployment and underemployment risk is Malawi’s most pressing concern for businesses in the short-term, in light of the demographic and technological changes that lie ahead, the World Economic Forum (WEF) has said.
WEF reports that this is besides energy price shocks and failure of critical infrastructure posing as the second and third top risks to businesses, according to the Sub-Saharan Africa Risks Landscape Paper.
The paper is designed from WEF Global Risks Perception Survey, which polls the Forum’s multi stakeholder community of experts, policy-makers and members of the private sector and non-governmental organisations as well the Executive Opinion Survey, which polls business leaders on critical aspects of competitiveness, and includes a question about risks to doing business in their respective countries.
The paper observes that one hurdle for economic growth on the continent, including Malawi, and the future employment of the current younger generation is the challenging state of its infrastructure.
According to the African Development Bank (AfDB), there simply is not sufficient infrastructure in power, water and transport services that would allow firms to thrive.
The AfBD calculations estimate that the continent’s infrastructure needs amount to $130–$170 billion a year, with a financing gap in the range of $67.6–$107.5 billion while the World Bank estimates that the continent’s infrastructure gap reduces productivity by approximately to 40 percent.
Reads the paper in part: “Africa’s population of young people is expected to double to approximately 830 million by 2050, representing 29 percent of the total world youth population; a trend that could open new economic opportunities for the continent.
“People in sub-Saharan Africa are still disproportionately likely to enter the labour market at a young age, and the region has the world’s lowest levels of access to higher education—a combination that is likely to perpetuate a cycle of low skills and working poverty.”
World Bank country director for Malawi, Tanzania, Burundi and Somalia Bella Bird observed on Wednesday in Malawi, there are 2 000 more young people entering the job market annually.
While observing that macroeconomic stability and growth alone is not enough if it does not impact on jobs, she said the energy sector is key in helping create businesses and jobs.
During his meeting with the World Bank delegation led by Bird on Wednesday, President Peter Mutharika said his government plans to focus more on rural industrialisation as a strategy for creating more jobs.
“We want to produce more goods and create more jobs in rural industrialisation. And we want to develop industrial parks as part of this strategy. Rural industrialisation is also one strategy for making Malawi become a producing and exporting country.
“Above all, we specifically want to see unprecedented development in manufacturing, mining, tourism and power production,” he said.