Firm Growth in Zambia

Selected Issues Papers, September 24, 2025

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Firm Growth in Zambia

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Bibliographic details

• Authors: Daniel Gurara
• Published: September 24, 2025
• Series: Selected Issues Papers
• DOI: https://doi.org/10.5089/9798229025225.018

Summary findings

• Firm growth in Zambia remains subdued, undermining the country’s potential to create jobs, raise productivity, and drive economic transformation.
• Formal businesses face persistent barriers—most notably limited access to finance, unreliable electricity supply, and competition from a large informal sector.
• Empirical analysis (using data from the World Bank Enterprise Surveys and cross-country entrepreneurship benchmarks) indicates:
  • Firms with access to credit and stable infrastructure grow significantly faster.
  • Firms facing severe constraints underperform.
• Zambia’s rate of new business entry remains low compared to aspirational peers, reflecting deeper regulatory and financial constraints.

Analysis and implications

• Constraints identified (limited access to finance, unreliable electricity, competition from a large informal sector) directly affect firm performance and contribute to Zambia’s low rate of new business formation.
• Slow firm growth and low new business entry impede structural transformation by limiting the shift of labor into more productive, formal sector employment.
• Scaling up existing businesses and enabling structural transformation require addressing both regulatory and financial constraints alongside infrastructure shortcomings.

Policy recommendations (as indicated in the paper)

• Remove key barriers to firm growth to:
  • Scale up existing businesses.
  • Support structural transformation by facilitating the shift of labor into more productive, formal sector employment.
• Prioritize policies that improve access to credit for firms and enhance the stability and reliability of infrastructure, notably electricity.
• Address regulatory constraints and limitations arising from competition with a large informal sector.

Publication and metadata

• Author: Daniel Gurara
• Publication date: September 24, 2025
• Series: Selected Issues Paper No. 2025/126
• Volume: 2025
• Issue: 126
• Pages: 16
• DOI: https://doi.org/10.5089/9798229025225.018
• Stock No: SIPEA2025126
• ISBN: 9798229025225
• ISSN: 2958-7875
• Subjects: Commodities, Electricity, Financial inclusion, Financial markets, Labor, Production, Productivity, Self-employment
• Keywords: Business Expansion, business formation, Electricity, Entrepreneurship, Financial inclusion, Firm Growth, firm growth in Zambia, Global, Jobs, Labor, Labor Market, New Business Formation, Productivity, Self-employment, Structural Transformation, Sub-Saharan Africa, Zambia, Zambia's rate

Source: Firm Growth in Zambia (Selected Issues Papers), Daniel Gurara, September 24, 2025.

Content in this bundle

• Firm Growth in Zambia; IMF Selected Issues Paper No. 2025/126; June 30, 2025
  • Firm Growth in Zambia; IMF Selected Issues Paper No. 2025/126; June 30, 2025 (Markdown version)
  • Firm Growth in Zambia; IMF Selected Issues Paper No. 2025/126; June 30, 2025 (PDF)