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Linear Consumption Is Broken — The Circular Economy Is the Way Forward
Mar 31, 2025
The concept of the circular economy focuses on the utilization of used products or by-products to create other products for use. It is not limited to recycling alone but encompasses a myriad of activities targeted towards the regenerative use of existing materials in a way that extends their life cycle to the maximum possible. These practices include reusing, leasing, refurbishing, and repairing existing materials for further use.
The Environmental, Social, and Economic Benefits of the Circular Economy
Economic Value Creation Through Circular Models
Economically, the circular model re-introduces utilized materials back into the economy, creating more value. Unlike linear production and consumption which focus on the single use of materials or products, the circular economy enhances resource efficiency and minimizes waste generation. With the linear model, waste generation is at its peak, resulting in additional costs associated with waste management.
In Africa alone, the circular economy holds immense potential, estimated to be worth $8 billion by 2030. The Circular Economy in Africa Report estimates this potential to translates to 11 million green jobs; addressing unemployment, poverty, and bridging inequality gaps.
Social and Environmental Impact
The social and environmental benefits of embracing the circular economy are far-reaching. It cuts across dozens of Sustainable Development Goals (SDGs) and contributes significantly to achieving net-zero targets. With resource depletion threatening future generations, the circular economy helps conserve natural resources and relieve the earth of current scarcity pressures.
It also enhances business resilience and longevity, especially important in today’s turbulent environment. Businesses that adopt circular models can significantly reduce their carbon footprints, cut costs, and promote responsible business practices. The result is a stronger reputation and increased profitability.
Sectorial Applicability of the Circular Economy Model
Circular Economy in Agriculture
In agriculture, the circular economy takes the form of utilizing biodegradable agricultural waste to produce organic fertilizers for reuse. Other models include bioenergy production and biodegradable packaging made from agricultural by-products.
Circular Economy in Manufacturing
The manufacturing sector is at the center of the circular economy. From product redesign to lean manufacturing practices, this sector offers wide opportunities to upscale circular models. Circularity begins at the design stage; where sustainability is built into the process. Manufacturing sets the foundation for other industries to adopt circular approaches.
Circular Economy in the Service Industry
In the service industry, circular practices span the entire value chain. This includes sustainable sourcing and procurement, utility efficiency (energy and water), and waste management. Examples include replacing single-use plastic bottled beverages with reusable glass packaging and reusing treated wastewater.
Key Drivers of the Circular Economy
Evolving Consumer Preferences
The push toward a circular economy is influenced by changing consumer behavior. Research by McKinsey shows Gen Z consumers prefer sustainable products. This is not just a trend, it’s a shift. Businesses that fail to align with this preference risk losing market share or becoming obsolete.
Tightening Global Regulations
Demand for sustainable products is also reinforced by strict international regulations. For instance, the EU Regulation on Deforestation Free Products (EUDR) has introduced mandatory sustainability criteria for agricultural exports. African countries exporting cocoa and other crops to the EU must comply to these regulations, making circular economy adoption essential, not optional.
Scarcity of Natural Resources
Natural resource depletion is no longer a distant concern; it is already disrupting supply chains and increasing production costs. The circular economy presents a practical response by reducing over-reliance on virgin materials. Businesses that embrace circularity are better positioned to survive shocks and shortages caused by resource scarcity.
Rising Waste Management Costs
The financial burden of managing growing volumes of waste is becoming unsustainable for both governments and businesses. Transitioning to a circular model not only minimizes waste generation but also turns waste into economic value. By reducing disposal costs and creating new revenue streams, circularity offers a smart financial incentive beyond just environmental benefits.
Where to Start: Practical Circular Economy Adoption
Start Small with Resource Efficiency
Transitioning to a circular economy does not have to be capital-intensive. It is accessible to Micro, Small, and Medium Enterprises (MSMEs) as much as large corporations. It begins with a transition strategy that helps businesses identify entry points. This avoids the misconception that circularity is unattainable.
According to the African Development Bank Group, MSMEs are the heartbeat of Africa’s economies. They represent 95% of all firms and generate more than 80% of new jobs on the continent each year. They must therefore, be at the center of the shift from linear to circular economy. For MSMEs, the journey starts with resource efficiency and responsible waste management. Assessing consumption and exploring circular opportunities helps save costs and improve operations.
Collaborations and Partnerships
Partnerships are crucial. Businesses do not need to re-utilize waste internally. They can collaborate with others who see value in that waste. For instance, a corporate office producing large volumes of waste paper can sell it to a tissue manufacturer. This not only applies the circular economy but also creates an additional income stream. That income can be used for more capital-intensive sustainability initiatives, like investing in renewable energy.
Linking Renewable Energy and Circular Economy
Renewable energy and the circular economy are interconnected. Both aim to maximize efficiency and minimize waste. Since energy powers industrial growth, it plays a central role in shaping the future of circularity.
Embed Circularity in Business Culture
Circularity must go beyond isolated practices. It should be ingrained into the culture of the business. This includes training teams to think circular, integrating sustainability into procurement policies, and redefining performance indicators to include environmental and social metrics. Culture drives continuity. When circular economy principles are embraced by the people within an organization, the shift becomes sustainable, scalable, and impactful.
The Business Case for Circular Economy
Understanding the environmental, social, and economic impacts of the circular economy justifies its adoption. These impacts make the business case for the circular economy compelling. With market, consumer, and regulatory forces driving the shift, the message is clear: businesses that fail to transition will lose relevance.
The circular economy is a strategic pathway to competitiveness and resilience—both essential for future success.