State of Social Enterprise Africa 2025

High solvency Medium solvency Low solvency9% 41% 50%Solvency levels of social enterprises (disaggregated by growth stage) FIGURE 17 Low solvency Medium solvency High solvencySeed stage Start-up stage Growth stage Established stage Expansion stage77% 17% 6% 63% 32% 5% 36% 56% 8% 33% 45% 22% 23% 44% 33% Percentage (%) Source: Survey data, World Economic Forum Solvency levels differ substantially based on the stage of the enterprise – see Figure 17. These findings suggest a strong correlation between the stage of enterprise development and financial stability, with earlier stages being considerably more vulnerable to financial insecurity. Key insights BOX 4 The solvency data highlights a crucial area for attention within the social enterprise ecosystem. High rates of low solvency among early-stage ventures – 77% in seed and 63% in start- up – reflect the challenges of operating with limited access to stable finance and a reliance on unpredictable funding sources. As solvency improves with maturity, the data underscores the value of targeted, strategic support at the earliest stages to help enterprises build resilience and cross the “valley of death”. A stronger ecosystem is one in which more ventures successfully transition from low to medium and high solvency, laying the foundations for sustained impact and growth. Social procurement: A pathway to financial stability What is social procurement? Social procurement is the practice of using purchasing power to generate social or environmental impact – for example, a company or government awarding an office-cleaning contract to a social enterprise that employs and trains people experiencing homelessness. Rather than focusing only on price or quality, buyers deliberately source from mission-driven suppliers. This approach is gaining recognition worldwide, particularly in the corporate sector, where companies integrate social enterprises into supply chains to meet expectations for ethical business, strengthen environmental, social and governance (ESG) performance and build more resilient, innovative models.63Why social enterprises in Africa are ready for social procurement Revenue through products and services: Survey results show that 73% of African social enterprises generate revenue by selling products or services to individuals, households or other businesses, reflecting a strong market-driven approach. For nearly half (45%), sales make up more than half of total income, while 29% also draw on donor funding and only 11% engage in public-sector transactions. This underscores their growing commercial orientation and points to untapped potential in leveraging procurement markets as stable, revenue- generating opportunities. Alignment with key public and corporate spend areas: A high percentage of social enterprises are active in sectors with significant public and corporate spend: education (21%), agriculture (15%) and health and well-being (12%). This overlap The State of Social Enterprise: Unlocking Inclusive Growth, Jobs and Development in Africa 35