1.2 Contextualizing social enterprise in Africa: Navigating structures, informality and policy frameworks Across Africa, social enterprises structure themselves in ways that reflect the diverse legal and socioeconomic environments in which they operate. Examining their registration choices, organizational models and degrees of formality clarifies how social enterprises operate to deliver social and environmental impact. Registration and organizational models The African social enterprise landscape is highly heterogeneous, shaped by diverse socioeconomic, legal and institutional contexts; in the absence of formal legal recognition in most jurisdictions, many register under conventional commercial or non-profit structures. Widespread informality also characterizes African economies, with informal sectors averaging 40% of each country’s GDP , ranging from 25–65%.27 For this survey, 76% of the total social enterprises were legally registered, with 24% operating without a legal registration. In this context, social enterprises adopt diverse structures and models to balance mission and sustainability within varying regulatory environments. These typically take the form of: –For-profit entities: The survey indicates that the for-profit model is the most prevalent legal structure for formal social enterprises in Africa, with 51% of respondents registered as a private company. This model is particularly dominant in countries such as Ethiopia, where 70% of social enterprises choose this structure, and Cameroon, at 79%. These enterprises operate as for-profit businesses with a clear social mission embedded into their core business model, yet “for-profit” covers varied approaches to pursuing social purpose. They may retain a standard business structure but orient it explicitly around achieving a social mission, with profit serving as the means to sustain and scale impact. Others adopt a blended value approach, where social impact and financial performance are deliberately designed to reinforce each other within a single, integrated model. –Non-profit entities: A significant portion of formal social enterprises, 23%, are registered as non-profit companies without shareholders. This model is common among organizations that rely more on grants and donations, using earned income to supplement mission-driven activities. Some 49% of social enterprises that indicated they generate income from donors and philanthropic institutions are registered as non-profit, showing alignment between this form and reliance on philanthropic funding. The survey data shows that this is a consistent choice across different countries, with 11% of social enterprises in both Ethiopia and Cameroon registered as non-profits. Even among those registered as non-profits, 44% of social enterprises generate revenue through the sale of products and services. –Alternative and hybrid structures: Where traditional for-profit or non-profit models are not chosen, some social enterprises adopt hybrid forms. About 4% are benefit corporations, legally required to pursue social or environmental missions alongside profit, and 2% are community benefit societies, owned by communities and reinvesting surpluses. Though rare, hybridity is often achieved by creatively using existing frameworks: some set up dual entities – one non-profit arm to access grants and another business arm to generate income; others cross- subsidize, using revenues from certain activities to support lower-income groups; while some combine cooperative ownership with private investment to scale. As one respondent stated: “We are hybrid. We have a non-profit entity that owns 100% of our for-profit entities … we are also setting up a mixed benefit foundation that can serve as a fund for scaling in Africa, alongside our country-level non-profit entities.” In this context, social enterprises adopt diverse structures and models to balance mission and sustainability within varying regulatory environments. The State of Social Enterprise: Unlocking Inclusive Growth, Jobs and Development in Africa 15

State of Social Enterprise Africa 2025