Why Africa Has the World’s Highest Entrepreneurship and Discontinuance Rates

Senegalese women sell processed mangos and yams Photograph: United Nations/Evan Schneider

By Tatenda Gwaambuka

Crunching the Numbers

According to the African Development Bank, 22 percent of Africa’s working-age population are starting businesses. This is the highest entrepreneurship rate in the world.

Africa’s female entrepreneurship rate is also the highest in the world; 27 percent of the female adult population is engaged in early-stage entrepreneurial activity.  This means African women are twice as likely to start a business as women elsewhere in the world. Small and Medium Enterprises are now the biggest formal employers in Sub-Saharan Africa and will undoubtedly be key in creating the 54 million jobs that Africa is expected to create by 2022. 

The numbers look great until one realizes that Sub-Saharan Africa also has the highest small business discontinuance rate of 8.4%. While the job creation potential is promising, it is a far cry from the demands – Africa will need 122 million new jobs by 2022. Further, only 20 percent of African entrepreneurs are introducing new products and services. Africa has a lot of survival entrepreneurs who were pushed into entrepreneurship by unemployment.

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