Why Africa Has the World's Highest Entrepreneurship and Discontinuance Rates Africa boasts of the world's highest entrepreneurship and female entrepreneurship rates. However, while entrepreneurial potential is high, the contribution to economic growth has been limited. The big question is: Why? 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. These are limited access to finance, unstable and costly access to electricity, political instability, high tax rates, corruption, and customs and trade regulations. It is clear that governments have a critical role in creating supportive environments for entrepreneurs to grow in key economic sectors. The African Economic Outlook, 2017 stated that entrepreneurs driven by opportunity are more productive and innovative. Unfortunately, 7 percent of Africa's working age population are survival entrepreneurs who "would contribute more to growth if they were in the formal labor market". These entrepreneurs are pushed into starting businesses because of unemployment or underemployment. Such entrepreneurs are accused of having limited potential for growth, reducing the number of capable workers and diverting resources more productive entrepreneurs could exploit and sending wrong signals about the returns on education.
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