Changing the Economics of Resources by Advancing Africa’s Circular Economy

A Significant Economic Opportunity
The scale of the opportunity is considerable. The African Development Bank (AfDB) estimates that Africa’s CE represents an annual opportunity of approximately USD 546 billion, with the potential to create more than 11 million jobs by 2030. AfDB has identified construction, food systems, plastics, textiles, electronics and mining-related value chains among the sectors where circularity can generate significant economic opportunities.

This opportunity sits within a much larger global transition. OECD projections suggest that shifting from a linear “take, make, dispose” approach to a circular system could generate as much as USD 4.5 trillion in economic growth by 2030. The circular economy could also generate up to USD 700 billion in material savings in global consumer goods. Meanwhile, the International Labour Organization, together with the World Bank and Circle Economy, estimates that 121–142 million people are already employed in circular-economy activities globally, spanning areas such as repair, recycling, reuse and waste management.

“Africa is not starting from scratch in its transition to a circular economy. Informal waste collection, repair, second-hand markets, reuse and recycling are already embedded in many African economies. The challenge and the opportunity is to formalise, finance and scale these activities into productive industries that create safer, more sustainable livelihoods.”– Faith Macharia, Partner, Kenya

Turning Waste into Value
One of the defining features of a CE is the shift in how waste is perceived. Instead of treating discarded materials as an end point, circular models view them as potential inputs into another productive process.

This has implications across some of Africa’s most important sectors.

In agriculture, organic waste can be converted into compost, biochar, animal feed and bioenergy, reducing disposal costs while creating additional sources of income. In manufacturing, products can be designed for repair, refurbishment and eventual recovery of their component materials. Construction and demolition waste can be reused or recycled into new building materials, while plastics, textiles and electronic equipment can generate secondary markets for recovered materials.

The African Circular Economy Alliance identifies food systems, packaging, electronics, fashion and textiles, and the built environment as areas with particularly strong potential for circularity.
For businesses, this creates opportunities across the entire value chain, from collection and sorting to processing, manufacturing, logistics, technology and consumer services.

“The commercial opportunity lies in moving beyond isolated recycling initiatives towards viable circular businesses and value chains. Investors will increasingly look for models that can demonstrate scale, reliable supply, market demand and a clear pathway to value creation.” — Carlotta Dal Lago, Head of Business Development, Marketing & Communications, ALN

Transforming Waste to Energy
The CE also intersects with one of Africa’s most pressing development challenges, which is energy access.

More than 560 million people in Sub-Saharan Africa remain without access to electricity, according to the latest global energy-access data. At the same time, African cities and industries are generating growing volumes of municipal, agricultural and industrial waste. According to the World Bank, Sub-Saharan Africa (SSA) generates roughly 174 million tonnes of municipal solid waste each year, and that figure is expected to more than triple by 2050 as urban populations grow.
Part of this waste stream can be converted into useful energy through technologies such as anaerobic digestion, biogas production, biomass and, for appropriate residual waste, waste-to-energy (WtE) facilities.

Research suggests that by 2060, SSA countries could generate between 20 and 58 million MWh of electricity annually from waste alone. This gives more credence to the utility of WtE plants in the region.

The opportunity is particularly relevant for organic waste. Technologies that convert agricultural and food waste into biogas or bioenergy can simultaneously address waste management, energy generation and agricultural productivity. The International Labour Organization highlights composting, biochar, black soldier fly farming and bioenergy as examples of approaches that can create economic activity around organic waste while supporting agrifood systems.

Waste-to-energy should not, however, be viewed as a substitute for recycling or waste reduction. Materials that can be reused or recycled often have greater economic value when kept in circulation. Energy recovery is most effective as part of an integrated system that prioritises prevention, reuse and material recovery before dealing with residual waste.

“Circularity can support Africa’s industrial ambitions by creating new opportunities around resource recovery, energy generation and local processing. The objective should be to develop systems that turn what is currently treated as waste into productive inputs for the economy.”— Julien Kavaruganda, Senior Partner, Rwanda

With over 500 terawatt-hours being generated annually by waste-to-energy plants, according to the International Energy Agency, countries such as Sweden, Japan, and Denmark have integrated waste-to-energy into national waste management systems. Sweden now imports waste from other countries to feed its energy plants

For Africa, it can look at the broader opportunity, which is to view waste, energy and industrial policy as interconnected rather than separate challenges.

Jobs and the Informal Economy
The employment potential is another important dimension. The AfDB’s estimate of more than 11 million potential jobs in Africa by 2030 highlights the capacity of circularity to contribute to employment and inclusive growth.

Many of these opportunities will emerge in activities that are already widespread across the continent, including waste collection, repair, refurbishment, resale, recycling and resource recovery. The transition therefore presents an opportunity not only to create new jobs, but also to improve the productivity, safety and earning potential of existing circular-economy workers.
Technology can play an important role. Digital platforms can connect waste generators with collectors and recyclers, improve traceability, facilitate payments and provide businesses with data on the movement and recovery of materials

This is particularly relevant for Africa’s young population. Developing technical and entrepreneurial skills around repair, recycling, renewable energy, waste management and circular manufacturing could create new pathways into employment while supporting the growth of local enterprises.

Financing the Transition
Scaling these opportunities will require significant investment. Circular businesses often face the same challenges that constrain other emerging industries: limited access to finance, inadequate infrastructure, fragmented markets and uncertainty around regulation. The African Development Bank notes that Africa faces an annual development financing gap exceeding USD 400 billion, while arguing that CE roadmaps can help countries identify priorities and translate them into investment opportunities.

The investment opportunity therefore extends well beyond recycling facilities. It includes collection and logistics infrastructure, waste-processing plants, renewable energy systems, circular manufacturing, technology platforms and new materials.

Blended finance and public-private partnerships could help de-risk early-stage projects, while commercial investors can support businesses with scalable models and established markets.

“The question is no longer whether Africa has circular economy opportunities, but whether the right financing can be mobilised to take those opportunities from concept to commercial scale.”— Geofrey Dimoso, Country Partner, Tanzania

Creating Regional Circular Value Chains
Scale will also depend on Africa’s ability to overcome fragmented national markets. The African Continental Free Trade Area (AfCFTA) provides an opportunity to develop regional markets for recycled and recovered materials, circular products and related services. Regional value chains could allow countries to specialise in different stages of collection, processing and manufacturing, creating economies of scale that may not be achievable within individual markets.

The African Union’s Continental Circular Economy Action Plan 2024–2034 provides a broader framework for this transition. At the 2026 African Circular Economy Alliance Annual Meeting, policymakers and private-sector stakeholders emphasised the need to move from policy commitments towards implementation, investment and regional value chains.

For East Africa, this regional approach is particularly relevant. Harmonised rules around waste management, extended producer responsibility, product standards and trade in secondary materials could reduce compliance costs and create a more predictable environment for investment.

Shaping Policy into Opportunity
Africa’s CE transition will ultimately depend on the quality of its enabling environment.
Governments will need to develop clear and enforceable regulatory frameworks, establish appropriate incentives, strengthen waste and recycling infrastructure, and create markets for recovered materials. Businesses will need to rethink product design, supply chains and resource use. Financial institutions and investors will need to develop financing models suited to circular businesses.

The regulatory dimension is particularly important because circular value chains frequently cross sectors and borders.

The direction of travel is already becoming clearer. Across Africa, governments are developing national CE roadmaps, while the African Union and AfDB are working to establish a continental framework for implementation. New initiatives are increasingly connecting circularity with industrialisation, employment, investment and regional integration.

For Africa, closing the loop is therefore about more than reducing what ends up in landfills. It is about changing the economics of resources, keeping more materials in productive use, creating new businesses around them, generating employment and retaining more value within African economies.

The CE could become an important pillar for Africa’s economic transformation, driven by how effectively it reuses, processes and creates value from the resources already within its economies.

Sources

African Development Bank | E Co. | Global Recycling | OECD | Thread Group | World Bank  | World Economic Forum | World Economic Forum