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Estimating the Number of Firms in Africa
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 by 2020 there were 12.7 million firms with more than one worker, and about 240 million own-account businesses, where the proprietor constituted the sole employee. Informality prevails among micro businesses, totaling 218 million own-account informal businesses and 9 million additional micro-businesses with fewer than five workers. Among a total of 2.3 million firms with five or more workers, 2 million are formal firms. 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.
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