Africa faces a dual challenge of sustaining growth while creating jobs at scale, shaped by rapid urbanisation, growing resource constraints, and one of the youngest populations globally. The circular economy presents a credible pathway to address both.
Estimates from the African Union suggest that a successful transition could generate up to 11 million jobs and contribute meaningfully to GDP growth by 2030. However, this opportunity requires deliberate action to address the structural constraints that continue to limit scale.
A defining feature of Africa’s circular economy is that it is already embedded within informal systems. From repair markets to reuse-driven trade, circularity exists across multiple sectors.
However, these systems remain fragmented, undercapitalised, and largely disconnected from formal financial and industrial frameworks. Moving from informal activity to scalable enterprise requires not just capital, but coordination, capability, and institutional support.
Kenya offers a clear illustration of both the opportunity and the gaps. Policy frameworks such as the Sustainable Waste Management Act and Extended Producer Responsibility regulations are creating an enabling environment, while sectors such as plastics recycling, sustainable manufacturing, and agri-waste are gaining traction.
At the same time, inefficiencies persist across waste value chains, data on material flows remains limited, and a significant proportion of waste, particularly plastics, is not effectively recovered. The result is a system with strong potential but constrained by execution gaps.
At the centre of this ecosystem are SMEs and MSMEs, many led by women and youth, who are driving innovation across the value chain. These enterprises are converting waste into products, building collection and processing systems, and developing new approaches to resource efficiency.
Despite this, they continue to face familiar barriers, including limited access to affordable and patient capital, weak market linkages, and insufficient technical support.
Traditional financing models are not well suited to businesses operating in emerging sectors with longer payback periods and higher perceived risk.
Addressing this gap requires a shift in how capital is structured and channelled. Blended finance provides a practical mechanism by combining public, private, and philanthropic capital to de-risk investments and unlock commercial participation.
Through guarantees, concessional funding, and credit enhancements, it allows financial institutions to extend capital to enterprises that would otherwise remain excluded, while improving affordability and tenor for businesses seeking to scale. It bridges the gap between innovation and bankability.
Financing alone cannot deliver sustainable enterprise growth without supporting the ecosystem. Sustainable enterprise growth depends on the strength of the broader ecosystem.
Development partners contribute technical expertise and catalytic capital, guarantee institutions enable risk-sharing, governments provide regulatory clarity, and the private sector drives innovation and scale.
When these elements are aligned, the result is not just access to finance, but the creation of viable, growth-oriented markets.
Sustained advancement in the circular economy will depend on how effectively partnerships are structured and mobilised. No single institution can address the financing, capability, and market access gaps in isolation.
What is required is a coordinated approach that brings together capital, technical expertise, and market connectivity to support sustainable enterprise growth.
There is a growing recognition across the private sector that business has a central role to play in advancing sustainable development outcomes.
The circular economy sits at the intersection of climate action, responsible production, and inclusive growth, and success will depend on how effectively businesses, policymakers, and development partners align their efforts and mobilise resources.
The transition to a circular economy in Africa will ultimately be defined by execution. The policy direction is increasingly clear, the entrepreneurial base is active, and the opportunity is well understood. What is required now is sustained collaboration, innovative financing, and a deliberate focus on building systems that enable enterprises to scale.
Closer to home, the focus must now shift to empowering enterprises to scale sustainably, unlocking opportunity for youth and women, and building a Kenyan economy that converts innovation into lasting value.
The writer is the CEO, Absa Bank Kenya and the Chairman of the UN Global Compact - Kenya.
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