Core area “Sustainable economic development, training and employment” Creating opportunities for young people

    Albania is growing, but poverty and high youth unemployment are weighing heavily on the country. The biggest challenge is the high rate of migration abroad and the resulting decline in the working-age population, coupled with the ongoing skills mismatch. German and European cooperation with Albania therefore promotes employment, innovation and regional development.

    Training of chefs in a vocational school in Kamza, Albania

    Training of chefs in a vocational school in Kamza, Albania

    Albania is experiencing solid economic growth. According to the World Bank, real gross domestic product (GDP) growth stood at around 3.9 per cent in 2024, with a forecast of around 3.2 per cent for 2025. However, the income situation remains difficult. More than a fifth of the population still lives in relative poverty; per capita income is well below the EU average, and more than a quarter of gross domestic product is generated in the informal sector.

    At the same time, the country is grappling with deep-seated structural problems. Among the biggest challenges are high youth unemployment – around one in five 15- to 29-year-olds is out of work – and the emigration of skilled workers. Entire villages in the north and east are losing their young people to Western European labour markets, while an ageing population is putting strain on social protection systems. Moreover, vocational training is not keeping pace with the needs of the labour market. Many young people are not gaining the skills that businesses urgently need. This gap between training and real-world demand is considered a major obstacle to sustainable economic development and is restricting opportunities for wider employment and growth in Albania.


    Objectives of cooperation

    IT training of young people in a vocational school in Kamza, Albania

    IT training of young people in a vocational school in Kamza, Albania

    German and European cooperation with Albania aims to create economic opportunities, promote employment and gradually bring the country closer to the EU single market. In the long term, the aim is to create a stable, inclusive and sustainable economic area that strengthens social participation, reduces regional inequalities and consolidates the European integration process.

    Project examples

    • The BMZ-funded Albanian Development Guarantee Foundation (ADGF) facilitates access to loans for small and medium-sized enterprises, thereby boosting employment and incomes. A special “Green Finance” funding window offers incentives for investment in energy efficiency and climate-friendly technologies.

    • A programme run by GIZ on sustainable rural development is fostering innovation in the areas of agriculture and tourism. Organic farming methods and sustainable tourism initiatives are boosting incomes and competitiveness.

    • The Multifunctional Centre in Kamza is improving the labour market relevance of vocational training in Albania. With an expanded campus, modern facilities and practical courses, young people can obtain qualifications that are better tailored to the job market.

    • The ProSEED 2.0 project is modernising curricula and integrating digital skills and “green skills”. It is providing green skills training to approximately 5,500 people. Around 800 companies are benefiting from advisory services in the areas of digitalisation and sustainability, and efforts are underway at the Ministry of Economy and Innovation to develop new strategies.

    • The Enterprise Innovation Fund provides equity for young, high-growth companies in the digital and technology sectors in the Western Balkans. It promotes innovation, competitiveness and employment, while also improving the financial environment for start-ups.

    • The Regional Challenge Fund (RCF) enhances young people’s employability through practical vocational training programmes developed jointly by schools and businesses. Modern facilities, advisory services and opportunities for dialogue on job-specific training are increasing the competitiveness of the private sector, promoting green skills and fostering regional integration.

    Progress at the local level

    • In the area of vocational training, over 6,000 participants found employment after completing their training programmes. Of the graduates, 35 per cent were women and 17 per cent returnees who are now re-entering the labour market.

    • Through KfW’s Regional Challenge Fund, a total of 128 companies (some of which are subsidiaries of German firms) have contributed to improved vocational training at vocational schools as part of 21 projects.

    • Germany’s development cooperation has supported the introduction of agrotourism, a model that has now taken off. Over 100 companies received German support and have now become firmly established, and agrotourism programmes are growing without any systematic external support.

    As at: 20/05/2026