## Firm Growth in Zambia

_Selected Issues Papers, September 24, 2025_

## Source details

**Canonical URL:** [Firm Growth in Zambia](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/09/23/firm-growth-in-zambia-570659)

## Other formats

- [Markdown version](/en/publications/selected-issues-papers/issues/2025/09/23/firm-growth-in-zambia-570659/index.md)
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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

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### 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.*

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## 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)](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025126.pdf.md){rel="alternate" type="text/markdown"}
  - [Firm Growth in Zambia; IMF Selected Issues Paper No. 2025/126; June 30, 2025 (PDF)](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025126.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/09/23/firm-growth-in-zambia-570659_