Building a Circular Economy Framework for Nigeria: A Path to Sustainable Economic Growth.
JIMMY ARIKAWE
・
OCTOBER 12, 2024
・
CIRCULA ECONOMY
Think of a country where waste ceases to be a problem but becomes a strong resource driving industries, creating employment, and contributing significantly to the economy. Now consider this: Nigeria produces 32 million tons of solid waste yearly; this is enough to build a tower higher than Mount Kilimanjaro, if stacked. Yet, over 80 percent of this lies neglected, clogging waterways, polluting communities, and burying billions of naira in untapped potential. Lagos alone churns out over 13,000 metric tons daily, which, if well harnessed, will go a long way to create massive economic opportunities. The global forecast is that circular economies will unlock $4.5 trillion by 2030, but Nigeria is in danger of being left behind. Faced with increasing unemployment, diminishing natural resources, and environmental degradation, it is not a question of whether we can afford to transition into a circular economy but whether we can afford not to.
The Current Economy Model
The Nigerian economy, still in the “take-make-dispose” mode, is gradually becoming unsustainable with rapid urbanization and a population of over 200 million people. Waste generation is growing at an alarming rate amidst struggling, underdeveloped waste management systems. On the other hand, a great deal of waste collection and recycling emanate from the informal sector, which operates in silos, not coordinated by formal structures. It is this lack of integration that fuels inefficiency, apart from wasting immense opportunities for economic value creation, job creation, and more sustainability.
The Case for a Circular Economy Framework
The transition to a circular economy presents Nigeria with multiple opportunities. According to the World Economic Forum, circular economy activities could generate $4.5 trillion in economic benefits globally by 2030. For Nigeria, this transition could create an estimated 3 million new jobs in recycling, remanufacturing, and service sectors by 2030.
Countries like the Netherlands and China provide compelling examples of how adopting a circular economy drives economic growth, creates jobs, and curbs environmental challenges. The Netherlands, for example, has firmly established itself as one of the leading countries in circular innovation. With programs such as the “Green Deals,” the country encourages collaboration between businesses and the government to eliminate regulatory barriers and foster circular solutions. The Dutch target is to become fully circular by 2050, focusing on resource efficiency in industries such as construction, agriculture, and manufacturing. These efforts will contribute an estimated 7% growth in GDP by 2030 and show promising potential for economic success driven by sustainability.
China, by contrast, has integrated the principles of a circular economy into its national development plan. The strategy started off with industrial symbiosis, whereby waste from one enterprise becomes input for another, thus streamlining material waste and saving on production costs. This has evolved through eco-design, resource efficiency, and extended producer responsibility, among other concepts, over time. The revised Circular Economy Promotion Law in 2017 indicates China’s commitment to resource conservation and environmental improvement.
Beyond economic opportunities, a circular economy framework would solve most of the significant environmental issues. According to +IQAir, in 2023, Nigeria’s air PM2.5 concentration reached 4.8 times above the annual value set by the WHO, ranking as the 35th country in the worst air quality rankings in the world. We could reduce up to 50% of pollution related to waste by applying circular principles, besides saving those valuable resources.
It is befitting to appreciate that the Nigerian government, through agencies like NESREA and the Federal Ministry of Environment, has taken positive steps toward waste management principles and the circular economy. The National Environmental Action Plan and recent policies on waste management reveal a slowly dawning understanding of the need for systemic change.
These are indeed commendable, but there is a need for an increasingly intentional and holistic application. This piece is not meant to belittle such efforts but to offer a strategic direction that can aid in amplifying and accelerating the transition. The framework I propose builds upon the foundation laid by current government initiatives, offering a more holistic, technology-driven approach that can be rapidly scaled and adapted to Nigeria’s unique economic and environmental landscape.
Key Components of the Framework
Policy and Regulatory Foundation
A holistic policy and regulatory framework is essential to drive the transition to a circular economy in Nigeria. This should begin with the introduction of Extended Producer Responsibility (EPR) programs, which make manufacturers responsible for the end-of-life management of their products. Additionally, tax incentives can be provided to companies adopting circular business models, such as remanufacturing, leasing, and product-service systems. Mandatory recycling targets for key sectors like packaging, electronics, and construction will create market demand for secondary materials. Finally, developing national standards for recycled content in manufacturing will stimulate the supply of high-quality recyclables.
Infrastructure Development
One important pillar in the circular economy framework would involve infrastructure building. This includes modern waste sorting facilities to segregate materials at source, material recovery facilities to process and beneficiate recyclables, and reverse logistics networks to channel waste streams back into productive use. Digitalization will play a key role, with tracking systems powered by sensors and blockchain technology to monitor material flows. Demonstration of the viability of these technological interventions through pilot projects in major cities would subsequently act as a model for nationwide scale-up.
Stakeholder Integration
Success depends on coordinated action from:
Government Agencies: Federal, state, and local government bodies must work in harmony to create an enabling environment. The 2024 Industry Insight Report by the Recyclers Association of Nigeria (RAN) showed that a major challenge faced by industry players are the unclear and restrictive government policies. The Federal Ministry of Environment should lead policy development, while state agencies like LAWMA in Lagos can implement localized programs. Local governments, being closest to communities, must focus on enforcement and community engagement. The government’s key role includes setting standards, providing incentives, and ensuring compliance through agencies like NESREA.
Private Sector: Nigerian businesses, from multinational corporations to SMEs, must reimagine their business models. Manufacturing giants like Dangote Group and Nigerian Breweries can lead by incorporating recycled materials into their production processes. The private sector’s responsibility extends to implementing Extended Producer Responsibility (EPR) programs, investing in recycling infrastructure, and developing innovative solutions for waste reduction. Companies must also collaborate with research institutions to develop new technologies and processes suited to local conditions.
Informal Sector Workers: Waste pickers and informal recyclers are the backbone of our current recycling ecosystem in Nigeria. Any framework that is successful needs to integrate these workers through formalization programs, social protection schemes, and skills development. The Alliance of Waste Pickers and other such associations are necessary participants in policy considerations and implementation planning. Clearly, the depth of their knowledge about local waste management practices and the networks that have already been established through this are invaluable assets toward finding effective systems for collecting and sorting.
Financial Institutions: Institutions like Banks, microfinance, and development finance organizations, have to develop specialized financial instruments for the circular economy initiatives. The Central Bank of Nigeria could offer guidance on green financing, and commercial banks could make favorable terms for projects relating to the circular economy. International development partners like the African Development Bank can provide technical assistance and offer funding support in large-scale infrastructure projects.
Academic and Research Institution: Universities and research centers play a crucial role in driving innovation and knowledge creation. Institutions like the University of Lagos and the National Research Institute for Chemical Technology (NARICT) should focus on developing locally appropriate technologies and conducting research on material flows. These institutions can also provide training programs for waste management professionals and conduct impact assessments of circular economy initiatives.
Civil Society Organizations: NGOs and community-based organizations serve as vital bridges between policymakers and communities. Organizations like the Recyclers Association of Nigeria (RAN) and environmental NGOs can lead public awareness campaigns, provide grassroots feedback on initiatives, and monitor implementation progress. Their role in education and advocacy is essential for building public support and ensuring accountability.
Implementation Roadmap
Short-term Priorities (1-2 years)
It is essential that the immediate focus be placed on creating a National Circular Economy Task Force to coordinate across the sectors. It will lead and support the formulation of detailed regulatory frameworks and design incentives to spur businesses in the adoption of circular practices. The government should run pilot programs in key urban cities, especially Lagos and Abuja, where waste management challenges are most pressing. Crucially, these are programs that intend to bring in informal sector workers, in recognition of their critical work that’s currently being done in the existing recycling ecosystem, into a more formal and supportive framework.
Medium-term Goals (3-5 years)
Building on the experience gained from these pilots, the government can start scaling up successful programs across the country. They should do this parallel to substantial investments in recycling infrastructure, which includes new sorting plants and material recovery facilities. Monitoring material flows and tracking the progress against the circular economy targets will be digitally supported by the government. In addition, the government can create multi-level training and certification programs so that a sufficiently skilled workforce is built, which could operate within the new circular economy.
Long-term Vision (5-10 years)
Our long-term goals should include achieving at least a 50% reduction in waste sent to landfills through improved recycling and waste prevention measures. The transition to a circular economy is expected to create three million green jobs across various sectors, from technical roles in recycling facilities to positions in reverse logistics and remanufacturing. Through these efforts, Nigeria will establish itself as an African leader in circular economy implementation, providing a model for other nations to follow. We should further strive to decrease the importation of raw materials by 30%, reusing more recycled materials and increasing resource efficiency, consequently enhancing economic independence.
Expected Roadblocks
Various significant issues beset the transition to a circular economy in Nigeria, for which strategic solutions will be required. Understanding such challenges in comparison to the experiences of other nations provides valuable insights into our way forward.
Infrastructure Deficit
Nigeria currently has less than 5 modern material recovery facilities (MRFs) serving its 200 million population, compared to the Netherlands with over 30 facilities for 17 million people. Our recycling infrastructure gap requires an estimated $2.5 billion investment over the next decade. South Korea, which achieved an 86% recycling rate, initially invested 2% of its GDP in recycling infrastructure during its transition period in the 1990s. This demonstrates the scale of investment needed for successful implementation.
Financial Constraints
Current public funding allocates only 0.2% of Nigeria’s GDP to waste management and circular initiatives, significantly below the World Bank’s recommended 3% for developing economies. By comparison, China invested 5.5% of its GDP in environmental protection and circular economy initiatives between 2016 and 2020, leading to a 35% increase in resource productivity. The funding gap particularly affects local governments, which typically bear 70% of waste management costs.
Technology and Skills Gap
While countries like Singapore have achieved 95% automation in waste sorting through AI and robotics, Nigeria’s recycling sector remains largely manual, with less than 5% of facilities using advanced sorting technologies. The skill gap is equally concerning – only 12% of waste management workers have formal technical training, compared to Malaysia’s 68% and Germany’s 95%. This gap affects operational efficiency and material recovery rates.
Cultural and Behavioral Barriers
Public awareness and participation in recycling programs remain low, with only 23% of urban Nigerians actively participating in recycling initiatives, compared to Rwanda’s 68% participation rate achieved through comprehensive public education campaigns. Studies show that successful circular economy transitions require at least 60% public participation to achieve economic viability.
To address these challenges, we propose the following comprehensive solutions:
Public-Private Partnerships (PPPs) will be crucial in bridging the infrastructure and funding gaps. Kenya’s success with PPPs in the waste sector, which attracted $300 million in private investment between 2018-2022, provides a replicable model. These partnerships can help Nigeria develop the necessary infrastructure while sharing risks and resources.
International cooperation and funding mechanisms offer another vital solution. The African Development Bank’s Circular Economy Facility, which provided $450 million in funding across Africa in 2023, presents an opportunity for Nigeria to access additional resources. This can be complemented by green bonds, which Ghana successfully used to raise $200 million for circular economy initiatives.
Technology adoption can be accelerated through strategic partnerships with established circular economy leaders. For example, Japan’s technical cooperation program with Vietnam led to a 40% improvement in recycling efficiency within five years. Similar partnerships could help Nigeria leapfrog certain technological stages.
Comprehensive stakeholder education programs should be implemented following Morocco’s successful model, which achieved a 45% increase in recycling participation rates through targeted community engagement and school-based education programs. This will include practical training for informal sector workers, public awareness campaigns, and integration of circular economy principles into educational curricula.
The Path Forward
The transition to a circular economy framework in Nigeria is not only an environmental imperative but an economic opportunity. By taking action now, we can place Nigeria at the forefront of sustainable development to create jobs, reduce pollution, and develop resilience in the economy.
Success for this framework will come from commitment on all three sides-government, business, and citizens. Moving forward, the focus has to be on practical, implementable solutions, keeping Nigeria’s unique context in full view while leveraging global best practices.
About the Author
Jimmy Arikawe is a circular economy expert with years of experience in Nigeria’s recycling sector, specializing in technology-driven solutions for sustainable resource management. He is the CTO of Circula, a clean-tech company dedicated to fostering a circular economy across Africa.