Estimating the Number of Firms in Africa

Marcio Cruz, Florian Moelders, Edgar Salgado Chavez and Ariane Tamara Volk

No 11032, Policy Research Working Paper Series from The World Bank

Abstract: This paper estimates the number of firms in Africa, considering their size and formal status. It relies on a novel methodology that combines multiple data sources. The results suggest that in 2020, there were 12.7 million firms with more than one worker, and more than 230 million own-account businesses, where the proprietor constituted the sole employee. Informality is prevalent among own-account, micro, and small businesses. The density of medium and large firms relative to the population remains low across African countries but is positively correlated with per capita income, whereas the prevalence of own-account businesses decreases as income levels rise. The proposed methodology provides valuable insights to researchers and policymakers by enabling an assessment of the potential market size based on firm characteristics in a context of limited information.

Date: 2025-01-13
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