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Estimating the Number of Firms in Africa

Author

Listed:
  • Marcio Cruz
  • Florian Moelders
  • Edgar Salgado Chavez
  • Ariane Tamara Volk

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.

Suggested Citation

  • Marcio Cruz & Florian Moelders & Edgar Salgado Chavez & Ariane Tamara Volk, 2025. "Estimating the Number of Firms in Africa," Policy Research Working Paper Series 11032, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11032
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    References listed on IDEAS

    as
    1. Bento, Pedro & Restuccia, Diego, 2021. "On average establishment size across sectors and countries," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 220-242.
    2. Yue Li & Martín Rama, 2015. "Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries: The Role of Micro- and Small Enterprises," The World Bank Research Observer, World Bank, vol. 30(1), pages 3-38.
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