The circular economy transition is a billion-dollar opportunity for Africa: here’s why

COVID-19 shrank economies around the world. However, the crisis presents a unique opportunity for many to rebuild green and potentially bounce back stronger than ever.

This opportunity is especially clear for the African continent when considering the circular economy (CE). While products and resources are made, used and disposed of in a “linear economy”, in a circular economy they are recycled, repaired and reused. This approach eliminates waste, strengthens resilience and is fast gaining traction as a new model for sustainable growth.

With the right enabling environment, CE offers a promising opportunity for economic development, value creation and skills development. And with the COVID-19 pandemic forcing countries across the globe to restructure their economies, Africa is in a strong position to take advantage of these emerging opportunities.

In a new report, the World Economic Forum’s Circular Economy initiative and the African Circular Economy Alliance examined what new industries could pose the greatest opportunities for people and the planet. According to this report, titled 5 Big Bets for the Circular Economy in Africa, increased circularity in these sectors will support the economy, jobs, and the environment on the continent in the long term.

Making ‘big bets’ on these sectors can lead to a range of benefits for Africa such as higher value supply chains and newfound resilience. Globally, these changes can help the world's transition to sustainable growth and ensure resources are protected.

Here are a few of the new industries that could reshape Africa:

COVID worsened food security issues across the continent. However, circular methods can help prevent hunger while boosting the economy and protecting the environment. For instance, training farmers in methods such as recovering wastewater for irrigation can help shift production to more climate-smart models. Additionally, converting food waste to organic fertilizer can strengthen green manufacturing and increase circularity in food systems. Rethinking agriculture can be key for the continent as the sector employs 60% of the Sub-Saharan workforce and comprises nearly a quarter of the continent’s GDP.

Recycling has emerged as a solution to the growing demand for goods with plastic packaging, but it must be scaled to both mitigate the environmental effects and have significant impact. To grapple with these trends, new circular-inspired incentives are needed. For consumers, this might come in the form of bottle deposit systems to prompt new behaviors. For business, this might come in the form of legislation and tax incentives to boost investments in recycling facilities. Such investments could present a significant opportunity: the global economy faces losses of up to $120 billion annually connected to plastic’s reduced value after first use.

As African cities grow, so do emissions. Greenhouse gas emissions in Africa are projected to increase by more than 2.5 times by 2050 driven by large transformations in urbanization, industrialization and electrification. Abating these emissions is possible through the promotion of low-carbon infrastructure. Planet-centric designs using mass timber can reduce waste, conserve forests and manage emissions in African cities that are currently growing at twice the global average.

E-waste management has become a major challenge facing many African countries because of lack of awareness, environmental legislation and limited financial resources. Attracting more investment for recycling e-waste will support green job creation and increased value capture. One key opportunity lies in developing the e-waste recycling industry and substantial collection facilities. This will require goods produced with longevity in mind, designed for recycling or repair. It will also include legislation that limits foreign e-waste. Such shifts could create new jobs and move many waste-pickers from the informal to the formal economy.

The current system for producing, distributing, and using clothing operates on a predominantly take-make-dispose model. A new textiles economy – based on circular economy principles – would lead to better outcomes. One immediate opportunity for this sector includes converting fashion and textiles waste into garments for commercial export markets. But changes can also come to agriculture, using regenerative practices for the growing of crops such as cotton that renew the soil, and practices that lean away from ‘fast fashion’ to new business models based on ‘upcycling’ existing garments. These moves also could tackle waste on a range of levels as less than 1% of material used for garments is recycled (leading to a $100 billion annual loss). Additionally, the fashion sector currently uses 342 million gallons of oil each year to produce plastic-based fibres.

To be sure, such changes won’t happen overnight. Such changes will require collaboration and a range of ‘enablers’ systems and structures that help make change happen. Such enablers include policies, business support, financial incentives, new technologies and infrastructure.

Still, these investments can bring new opportunities and resilience to the African continent, protecting its resources and people. With such moves, Africa could serve as a model to the world on how to make the circular transition a reality, shaping how we live and work in the days and years ahead.