A Cost Benefit Analysis: Improving Industrialisation and Youth Employment in Malawi

This analysis grew from two distinct research questions: “Where should Malawi focus its resources to achieve industrialization?” and “Which policies can effectively address youth unemployment and underemployment?” In considering the challenges and opportunities for both areas, the authors recognized a number of overlaps and common spaces for growth, and as such, the analysis was merged. Malawi’s young workforce participants are reliant on Malawi’s ability to improve industrialization, without which any amount of skilled labor would remain unused. Since 1980, Malawi’s growth has fallen behind the Sub-Saharan Africa average, with weak and volatile growth highly dependent on rainfed agriculture and unreliable agricultural outputs. Maize and tobacco have been at the center of Malawi’s politics and economy, however, in order to achieve economic growth, there is a need for product diversification and investment in measures that promote productivity. At the same time Malawi’s youth have constrained opportunities for decent and full time employment. A quarter of youth in Malawi are underemployed, and almost all youth are employed in the two lowest skill tiers of employment, including youth who have finished secondary and tertiary education. More than 40% of youth who are deemed highly skilled only work in jobs that require low skill levels, typically self-employed, informal, micro-enterprises that have limited value addition. Conventional skill development programs, which are regularly conducted in response to youth unemployment, fail to adequately respond to these challenges.