The future of Africa is in its own hands. Unlocking its resource potential through the circular economy is the first step towards a bright and prosperous future.

Catherine Wijnberg and Bridget Wijnberg, Fetola

T here is no escaping the reality that Africa is on a trajectory of explosive population growth with dangerous ramifications in terms of economic, environmental and social impact on both the continent and the world. The figures are stark, almost incomprehensible in their largess. The United Nations World Population Prospects 2022 report projects that sub-Saharan Africa will account for most of the growth of the world’s population over the coming decades. It is expected to almost double, surpassing 2 billion inhabitants by the late 2040s, ballooning to 3.44 billion by the end of the century.1 On the current trajectory, it will become the most populous of the eight geographic regions in the late 2060s, surpassing Eastern and South-Eastern Asia and Central and Southern Asia.

If the continent is to avoid becoming trapped in an increasingly desperate situation of ever-depleting resources which will further entrench poverty, significant change will require something exceptional. By 2050, 86 percent of the world’s extreme poor will live in sub-Saharan Africa. One glimmer of hope is Africa’s youth, the very sector that will fuel this population growth: by the same marker, 2050, the continent will also have the largest percentage of young people, in fact, it is the only region where this demographic is increasing.2

Alongside this is a current landscape in which only one in six of these African youth are in wage-paying employment juxtaposed against an annual deficit of 7.3 million jobs.3Their situation is desperate right now. What is meaningful amongst these projections, however, is that these youth are being moulded in an environment of intense and rapid change. They are innovators and tech-savvy, and perhaps crucially, 1 in 5 see entrepreneurship as their only option.4,5

The needs of both the people and the planet call for an urgent and significant shift to fuel a different more resilient and sustainable model. To lift people out of the poverty cycle we need locally-driven economies that promote economic growth, generate wealth and create that needed 7.3 million jobs per year. If this growth is driven with the current waste creating linear business model, this would generate a massive ecological footprint. The negative effects of which could wipe out the benefits of those gains. To solve unemployment and poverty at this scale will require a different strategy. A circularity-based economy has the mechanisms to meet the economic and employment needs and reduce negative environmental impact.

Circular business models design out waste, keeping products in use for longer and re-using raw materials to eliminate waste water, energy, materials and pollutants at source, and reduce total waste to landfill. 

Circular solutions create the competitive advantage of a more efficient business model, present opportunities for bottom-up innovation, stem the onslaught of biodiversity loss and address climate change. They can also be incorporated at a grassroots level with the baseline of nil access to resources, either financial or material, to make a viable living. Or at the higher level industry disruptors have the potential to create system-level change, by taking advantage of new technologies in the circular economy and embracing Africa’s IT transition such as blockchain6 to track resources, build trust, and create financial transparency.  The adaptability and willingness of youth to embrace change has already set in motion the foundation for pivoting the business world and unlocking a bright and prosperous future. 

Onboarding

For broadscale uptake, there first needs to be a basic understanding of the opportunities that circular business offers. Perhaps the most effective way is to shine a light on relatable role models within communities.

The survivalist sector of the population considers circularity a luxury item, yet it has the potential to be their path to a legitimate future. For example, Alfred Esiang stumbled into waste management through his garden service when he kept being asked to remove waste. His side hustle, which began from that first request with two bicycles, is now a thriving entity with its own fleet of cars and property, and an accredited training development centre that specializes in artisan development.7 Artisanship in this space extends from the pavement sold curios to the breathtaking high-end designs of award-winning recycle artist Heath Nash.

As citizens embrace a mindset of zero waste it becomes clear that they are sitting on a treasure trove. The recycling entrepreneurs spotlighted in PETCO South Africa’s Message in a Bottle series8 illustrate the classic example of resources that can be tapped from rubbish dumps. Whilst some still see the circular economy as an unnecessary distraction – industry is showing the way by embedding it into their model. Agripreneurs are creating efficiencies in the farm to market delivery chain by incorporating tech such as e-commerce platform Agrikool9, whilst Suame Magazine Automotive Cluster in Ghana has spawned the largest repair and manufacturing cluster in Africa.10 

As with any shift in mindset, repeated exposure to a positive narrative is necessary to gain any traction. 

Making the transition

For entrepreneurs eager to transition, the mechanisms to achieve this may feel overwhelming. Addressing this basic knowledge gap, Youth Business International has launched their trial of a global circular business startup toolkit which embraces all industries and will form a free resource accessible for all. But designing it is often complex, and what might be considered sustainable in South Africa for example, might not align with German legislative framework.

However, for capacity building at the scale needed for country-level impact governments too should be onboarding new thinking and providing training and education of the public sector to ensure that policymakers and implementers have the right tools at hand. Bold futuristic governments such as Rwanda have already activated circularity as a key policy, providing the lead for other African governments to follow suit.

Resource rich

Access to raw materials is often limited by its traditional definition. Yet by identifying the value in somebody else’s discarded “waste value chain” and re-imagining it as a rich resource and a “materials value chain” can solve the issue of excess production, and instead create an endless cycle of re-use and regeneration. This is how Mo’s Crib, a sister duo, established their model that now retails décor baskets in New York woven from old PVC waterpipes reclaimed from landfills and building sites around South Africa. Other businesses are similarly breaking the mould from the agriculture sector to manufacturing11, the possibilities are endless.

Finance

Access to finance is critical for scalable business growth and there is much need to demystify understanding of the circular economy here too.  The financial industry’s perception that the circular economy is high-risk (only 3% of green funds are invested in Africa12) is a particular hindrance to small business wanting to invest in new closed-loop technology. Currently in the developmental stage, The Green Tech Exchange (GTex) is aimed at closing this gap between innovation and finance by matchmaking verified innovators with investors, whilst enabling new methodologies, providing entrepreneurs with knowledge resources and stimulating market growth opportunities. Investment Readiness also forms a key component of Fetola’s Circular Economy Accelerator (a mentorship and training programme for small businesses) giving entrepreneurs clarity on how to communicate their value proposition to investors.

Collaboration

A pivot on such a monumental scale cannot occur without global uptake and participation. There is no time to waste in reinventing the wheel – collectively we need to learn, share and leapfrog to avoid duplication, gain momentum and fuel rapid transition.

It is collaboration and knowledge sharing for the greater good. Responding to this The World Circular Economy Forum in Rwanda led to the establishment of two platforms to connect business, government, researchers and civil society, both the Circular South Africa (CSA) and the African Circular Economy Network (ACEN) Zambian Chapter.13

Regulatory frameworks

In turn at a governmental/international trade level policy framework needs to align with this modern circular epoch. Governments are still behind the curve in terms of acknowledging the potential for this new economy and in providing the political will and mechanisms for businesses to adopt it. International, regional and national policies need to be coherent, relate to one another and create favourable conditions, and in turn create the financial instruments that accelerate the transition to a just circular economy by de-risking investment into circular economy startups.14 With access to finance so challenging, governments should be providing tax breaks and subsidies to set the transition in motion.

The circular economy has the capabilities to make a real impact in Africa, but to drive the transformational change on such a massive scale will require a unified voice and the right enabling environment in place. There cannot be conservation and regeneration of the natural environment if the human dimension of economic prosperity and well-being is left out. To avoid the risk of an Africa mired in endless, hopeless poverty with its global ramifications – knowledge sharing, synergies and collaboration makes societal sense.

About Fetola

Fetola is a leading provider of scalable, world-class entrepreneurial support programmes that deliver lasting social, environmental and economic impact. Their goal is to grow the economy, create inclusive wealth and generate jobs by helping people build businesses that last. This is achieved by providing proven business strategy, systems and support, while unlocking the personal leadership power of entrepreneurs who are inspired to leave a lasting legacy.

Fetola means “change” in Sesotho – and the Fetola team are inspired by UN Global goal 17 to generate change at a global scale and foster partnerships that are a force for good. For more information, visit https://fetola.co.za/.

References:

1UN  World Population Prospects 2022 – https://www.un.org/development/desa/pd/sites/www.un.org.development.desa.pd/files/wpp2022_summary_of_results.pdf

2https://www.brookings.edu/blog/africa-in-focus/2018/09/20/figures-of-the-week-africas-growing-youth-population-and-human-capital-investments/

3https://www.citiesalliance.org/newsroom/news/cities-alliance-news/%C2%A0burgeoning-africa-youth-population-potential-or-challenge%C2%A0

4https://fetola.co.za/the-uncertain-future-of-young-african-entrepreneurs/

5https://www.oliverwyman.com/content/dam/oliver-wyman/v2/publications/2020/jun/JAA-Survey%20.pdf

6https://www.iol.co.za/business-report/companies/these-are-the-top-technology-trends-businesses-should-know-about-in-2023-da15e165-5175-4db3-9ccb-3b0aaa0ac1f7

7https://bizly.club/entrepreneurs-are-making-money-from-waste/

8https://www.youtube.com/user/1isPET

9https://bizly.club/technological-innovations-in-the-farming-sector/

10https://emf.thirdlight.com/link/1xpq6ci26lva-52isfm/@/preview/1

11https://fetola.co.za/beyond-recyling-a-climate-adapted-business-landscape/

12https://climatechampions.unfccc.int/africa-green-finance-coalition-seizing-the-opportunity-that-green-investment-provides/

13https://www.sitra.fi/en/publications/wcef2022-summary-report/#rethink-trade-and-development

14Ibid