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Africa’s circular economy needs support from policymakers

Decision makers in Africa have the opportunity and the responsibility to use circular policies to improve economic growth and human well-being while protecting the environment.

Writers

Bonmwa Fwangkwal

Program Manager, African Circular Economy Alliance (ACEA)

Elisa Luotonen

Expert in Circular Economy, African Development Bank Group (AfDB)

Laura Järvinen

Senior Lead, Biodiversity and everyday life

Published

According to the Ellen MacArthur Foundation, transitioning to a circular economy could help reduce greenhouse gas emissions by 45 per cent. Circularity is particularly relevant for African countries, whose economies remain largely resource dependent and under sustained pressure from rapid population growth.

A transition to a green economy is an opportunity to promote social inclusion, poverty eradication and sustained economic and employment growth, while simultaneously maintaining a healthy ecosystem. Africa can quickly adopt circular principles because its ecological footprint is still low and there is growing interest in the circular economy. Circular practices are embedded in many of the continent’s cultures and activities, particularly within micro, small and medium-sized enterprises (MSMEs).

More recently, the emergence of economic activities centred around repairing, refurbishing and recycling end-of-life products as well as growing access to renewable energy have contributed to expanding circular systems in Africa. Nonetheless, the circular economy model is yet to become a viable contributor to national development on the continent, as circular practices have mainly remained in the informal sector.

Policymakers have a significant role in promoting the circular transition. Global shocks, including the COVID-19 pandemic, have forced countries to restructure their economies. Africa is in a solid position to take advantage of these emerging opportunities for reform.

Policymakers advance the transition

The regulatory framework can support the mainstreaming of circularity. Tax breaks for circular businesses and higher taxes for wasteful products create incentives for the private sector to promote circular solutions. Also, institutional procurement schemes such as paperless procurement and plastics ban in government institutions are low-hanging fruits for policymakers that could accelerate the dissemination of circular innovations among the private sector.

On the other hand, households can promote the transition by adopting new practices. Policy incentives and advocacy can encourage households to adopt new methods of consumption, such as sharing and renting. This creates an opportunity for a continent like Africa, with a growing population and economy, to ensure that socio-economic progress is not coupled with unsustainable consumption patterns.

The challenge is that the circular economy cuts across sectors which are already regulated, such as agriculture, waste management, energy and trade. Instead of implementing policies in silos, policymakers need to integrate the principles of circularity in existing regulations. The development of national circular economy road maps that outline actions to transform existing value chains are a tool for this.

A circular economy road map encourages positive change

National and regional circular economy road maps outline the practical steps for society to move from a linear “take-make-waste” model into an economic model that protects resources and eliminates waste.

In 2016, under the leadership of Sitra, Finland was the first country in the world to create a national circular economy road map. This map has resulted in not just commitments, but real action. More countries are creating similar maps, so Sitra has created a guide to support and inspire others in this process. African countries, such as Nigeria, Rwanda, Ghana and South Africa, are showing high interest in creating national circular economy road maps and some have already started the process.

The most important part of the development is to design solutions that work in a given context – not just copying what someone else has done, but to consider the capabilities and resources of each country. Winning solutions are not created using only the old “top-down” way of doing things, but rather by diverse co-operation and by persevering with effort and commitment. Government, business, academia and civil society need to be involved in the process as they all play a crucial role in the circular transition.

Global value chains require international governance

As modern global value chains go beyond national borders, regional and international implications need to be taken carefully into account. For example, a more restrictive policy on trade of products and waste enacted in one country could redirect material flows to countries with looser regulations. Policy co-operation on a regional level can support the harmonisation of regional standards.

Platforms for policy dialogue, knowledge sharing and project co-ordination such as the African Circular Economy Alliance (ACEA) can enable greater collaboration at the regional and continental levels in areas such as policy harmonisation and technology transfer. Continental initiatives like an Africa-wide circular economy roadmap are also being developed to create the necessary frameworks for mainstreaming circularity as a driver of socio-economic development.

However, the regional lens alone is not enough. To prevent leakages, the African frameworks must be aligned with global best practices and international conventions.

The role of infrastructure

Governments also need to promote circularity indirectly by creating favourable infrastructure to support the establishment of circular value chains. Communications and transportation networks, as well as energy and factories for sustainable processing enable the private sector to transform production in Africa.

African countries have successfully leapfrogged into mobile phone technology and could do the same with renewable energy. However, the mainstreaming of circular innovations could be hindered by poor infrastructure and compliance issues stemming from policy gaps.

Another indirect mechanism is to encourage the private sector and industries to develop voluntary incentive mechanisms to foster their transition to circular business models and enable them to take advantage of new market opportunities. Local Chambers of Commerce and industry organisations have an important role in this development.

Ensuring a just transition

The circular economy provides a prime opportunity to create new economic activities and support job creation. Nonetheless, workers – particularly in informal industries – need new skills to find jobs in the new economy. Otherwise, all their human potential is wasted. Governments need to make sure that school systems provide quality education in this dynamic and fast-evolving atmosphere and that workers are proactively offered lifelong learning.

Governments can also regulate informal activities to encourage inclusivity and a fair labour market. In the African context where the informal sector is large, this is particularly relevant and offers a great opportunity to create safe and sustainable employment opportunities.

African leaders can encourage the international transfer of existing circular technologies or the adaptation of borrowed technologies to the local context. There is also scope for technology transfer across sectors and across businesses for compounded impact.

On the other hand, the deployment of new technologies can be hindered where policy lags innovation and compliance issues arise from regulatory gaps. The manufacturing of bio-based materials is an example of a circular innovation that is not currently supported by health and safety standards. Governments need to make sure that innovations are not delayed by cumbersome bureaucracy.

Measure, then act

You can only manage what you can measure. Therefore, decision-makers should close the wide knowledge and data gap regarding the circular economy in Africa. They must develop taxonomies, harmonised KPIs (key performance indicators) and harmonised measurement frameworks for circularity. Strengthening the capacity of national agencies to generate and disseminate data to inform decision-making is the foundation for setting up ambitious and measurable targets for sustainable growth.

The private sector will also benefit from better access to data to support and scale-up circular business models and catalyse financing for circular initiatives. Drawing a road map is a good idea, as it enables a multitude of parties to be part of defining the direction for the future of the economy – all the way from governments to businesses and from local authorities to the third sector.

What is this about?

This article is part of a series addressing topics relevant to the circular economy and Africa. These topics will be discussed at the World Circular Economy Forum 2022 in Kigali, Rwanda.

What's this about?