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An International Centre of Excellence in Public Policy and Research

Circular Development-Accelerating the Agenda in Kenya

Introduction

In the post-industrialization period, most economies adopted the ‘take-make-waste’ linear model that is less regenerative and more predatory to the environment, businesses, and society at large. Against the backdrop of growing global population, already degraded environment with over-exploitation and increasing concerns of climate change, it is imperative that economies reconsider their production models in favour of the circular economy. A circular economy adopts production/business models that are both regenerative and restorative by design and execution by manufacturing goods that can be reused or easily repaired for further use, reusing waste/by-products, and recycling raw materials as much as possible. The key tenets of circular economy are designing out waste, keeping materials in use, and regenerating natural systems (Ellen MacArthur Foundation).

Globally, about 100 billion tonnes of raw materials enter the production channel per year (Global Circularity Report, 2021). However, only 8.6% of all these are recycled, implying there is a high probability of demand for raw materials outstripping its supply in the future (Global Circularity Report, 2021). In 2019, the United Nations Environment Programme (UNEP) warned of a potential doubling of raw materials’ extraction to about 192 billion tonnes and a 43% increase in global greenhouse gas emissions by 2060 (UNEP, 2019). Furthermore, the increasing commodity prices and resource scarcity poses a great threat to global supply chains, whose effects are likely to be large on the developing economies.

The circular economy development path has the potential of reducing material use and thus conserving the environment. For example, statistics show that the adoption of a circular development path leads to US$ 700 material savings globally[1] per year. A circular economy also has the potential of building resilience of businesses against economic and supply chain shocks, since it implies less reliance on raw materials and more focus on recycling inputs, waste, and production of easily repairable and high-quality products. Further, decomposition of waste is a potential tool of boosting soil nutrition, which is a better alternative to expensive and partially hazardous artificial fertilizers used in agriculture. Statistics show that globally, soil degradation costs about US$ 40 billion, excluding the costs of fertilizers[2] per year. Other benefits of the circular economy include environmental conservation (less greenhouse gases and less extraction of materials), employment creation through the extra stages of production created in the circular path, adequate food supply, and generally high quality of life.

Adoption of the Circular Development Path

Various developed economies have taken tremendous steps towards a circular development path. For instance, Denmark has set foot in the circular path through amalgamation of related firms to take advantage of economies of scale, hence resource efficiency and waste minimization. China has adopted the 3R methodology of reduce, reuse, and recycle to reduce the negative environmental impacts of her rapid economic growth since 2005. This is augmented by stringent legal interventions such as the ban of plastic bags’ importation to China in 2018 and waste materials recirculation. The manufacturing industries in Germany have adopted a re-designing path and the circular principle of keeping materials and products in use by improving their designs for durability, repairability, servicing, refurbishment, reconstruction, redistribution, and maintenance to keep them in use for a long time (Halog and Anieke, 2021). Other countries leading in the adoption of the circular economy development path are Netherlands, France, the United Kingdom, Norway, and USA.

The concept of circular economy is gaining momentum and traction in Africa with Nigeria, Rwanda, and South Africa launching the African Circular Economy Alliance in 2017[3]. The membership to the Alliance has since expanded to include Ghana and Cote d’Ivoire. Kenya cannot wait any longer to adopt the circular development path and take advantage of the opportunities presented by this development paradigm. The country is characterized by voluminous waste with the industrial and construction sectors producing 816 million tons of waste in 2017[4]. Further, there is a possibility of natural resource depletion, given the increase in volumes of raw materials used in the production process to adequately provide for the increasing population. According to the census of industrial production conducted by the Kenya National Bureau of Statistics in 2018, there was a 39.1% increase in the value of raw materials to a tune of Ksh 796.50 billion in 2017 compared to 2009 with manufacturing sector holding the lion’s share[5].  Given the linear relationship between natural resources depletion and population growth rate (Payne, 2020), it becomes a priority to shift to a circular economy to minimize natural resource depletion and enhance savings on raw materials.

Figure 1: Natural resource depletion (% of GNI) and population growth rate (%)

Data Source: World Bank (Various), World Development Indicators

That said, collaborative efforts between government agencies and the private sector have seen Kenya make tremendous progress towards circularity in some sectors of the economy. For instance, there is a firm tracking of renewable energy adoption that is carbon-free. Kenya’s renewable energy sector continues to lead in Africa with major projects such as the Tana Delta project in the Seven Folks Dam, the geothermal power plant in Naivasha, and the wind power project in Turkana. Solar energy is vastly harnessed to light up villages and rural towns in Kenya, with innovations from sprouting companies such as M-Kopa that allow for payment of solar grids using M-Pesa and in small instalments to make it affordable.

In addition to the existing policies on waste management and legislative provisions on clean environment, efforts have been made to develop some augmentative policies and legislations to support the circular economy. Some of these include the ban on single-use plastic bags in 2015, a ban on the same in select areas such as parks in 2020, and the sustainable waste management bill which is currently under consideration. Others are the Environmental Management and Coordination Act of 1999, the ongoing development of an Extended Producer Responsibility Policy, and the revision of the building code to include principles of circularity in the construction sector. Further, in 2015, the Government of Kenya put a ban on scrap metal trade (through the scrap metal Act of 2015)[6] to minimize metal theft and allow for efficient metal usage even after their end of life. However, implementation of this ban is daily becoming difficult due to porous borders especially at Namanga, Taveta, Busia, and Lunga Lunga[7].

Interventions on resource efficiency and proper waste management have birthed various companies such as Twiga Foods, Taka Taka Solutions which composts organic waste and sells it back to farmers as fertilizer, the Clean Green Kenya, which hopes to be an information hub for material recycling, the Ekotech Kenya, which collects waste material and sells for recycling, and the Soko Fresh Company that offers quality storage facilities for smallholder farmers post-harvest to minimize food spoilage. Some dealers of car products and spare parts allow for return of tyres after their end of life for recycling purposes. Furthermore, Coca Cola Company, in its ‘World Without Waste’ vision, targets that by 2025, 100% of its bottles will be recyclable and has partnered with PETCO and other companies for collection of used bottles for recycling. Noteworthy, Kenya’s banking sector has demonstrated laudable efforts towards the green agenda, which is a core tenet of the circular economy. For instance, Kenya Commercial Bank received an accreditation to the Green Climate Fund as the first intermediary for the implementation of green financing initiatives in East Africa. This has facilitated access to financing for climate change-related projects. The same bank also collected funds from IFC and other development partners to a tune of about US$ 150 million to support initiatives towards reducing greenhouse gas emissions. The bank has also integrated UN SDGs and the Paris Climate Agreement in their strategic plan and reporting to support sustainability[8].

If the circular economy development path is well tracked and operationalized in Kenya, the economy is likely to benefit enormously in terms of reduced carbon emissions, environmental conservation, creation of job opportunities in the new opportunities to close the loops, and general resource efficiency, among other ways. For instance, the European Union predicts several benefits to Kenya if the circular economy path is to be adopted compared to the baseline scenario. In a circular economy scenario, GDP growth rate is expected to be 0.5% higher than in the baseline scenario by 2030 (Karcher et al., 2020). Exports are also projected to increase by 0.2% while imports and prices decrease by 0.8% and 0.1%, respectively, by 2030 if the country quickens her steps towards a circular economy. There is also a projection of increased job opportunities by 0.15% in the circular economy scenario by 2030, with most of the additional employment coming from the agriculture sector (Karcher et al., 2020). Although not many studies have been undertaken to quantify the potential benefits of a circular economy wholly, the above results are a motivation to press on towards circularity in Kenya.

Policy Gaps, Challenges, and Opportunities

Efforts to place Kenya on a circular economy development path have been largely facilitated by a few stakeholders, mainly the Ministry of Environment and Forestry, Ministry of Industrialization and Enterprise Development, Kenya Private Sector Alliance, Kenya Association of Manufacturers, international development partners such as the United Nations’ Development Programme, and formal and informal businesses focusing on proper waste management. This is a cross-cutting process that requires involvement of all stakeholders and, therefore, the need for a comprehensive policy framework that integrates the various sectors of the economy and the key players towards the agenda.

Additionally, most of Kenya’s circular solutions are inspired by the dire need for proper waste management. This implies more opportunities for circularity if stakeholders expand their focus to design long-lasting and restorative production patterns. For instance, a lot is required to introduce the circularity principle to the construction sector where there is still a lot of material consumption due to the continuously increasing building and a lot of waste from demolished buildings. Further, noting the great contribution of the construction sector towards environmental degradation and high consumption of materials with nothing much done to integrate circular economy principles in this sector, it is important that the sector develops sector-specific policies to facilitate material saving and reusing.

Most of Kenya’s policies in support of the circular economy are only centred on the principle of designing out waste and partially regenerating natural resources with limited interventions on keeping materials and products in use. The principle of keeping materials in use is largely implementable by the manufacturing sector, and thus a lot of effort and support is required to fast-track the opportunities to redesign products for long-term life spans by redesigning products to allow for repair, servicing and maintenance, refurbishment, re-establishment, and generally high-quality goods. Noting that financing is a crucial aspect in the circularity agenda, it is imperative that Kenya’s banking sector is brought on board in the discourse towards circularity.

Finally, the importance of collection of quality data to inform circular economy interventions cannot be over-emphasized. Data on circular economy in Kenya is largely scanty and the little that is available is on waste collection and volumes of raw materials for some sectors of the economy. Furthermore, this data is not regularly collected, thus creating a gap in fast-tracking progress towards circularity. Thus, it is necessary to have frequent collection and management of data on the key indicators of the circular economy to ensure evidence-based decision-making and fast-track the progress towards circularity.

References

Ellen MacArthur Foundation: Circular economy in detail, https://archive.ellenmacarthurfoundation.org/explore/the-circular-economy-in-detail

Halog, A., Anieke, S. (2021), “A review of circular economy studies in developed countries and its potential adoption in developing countries. Circ.Econ.Sust. 1, 209–230. https://doi.org/10.1007/s43615-021-00017-0.

Karcher, S.Y., Wekesa, Z.W., Waweru, J.K., Käsner, S., Desmond, P.K., Smit, T.A.B, Hemkhaus, M., Ahlers, J., Van Hummelen, S., Chewpreecha, U., Smith, A. and McGovern, M. (2020), Circular economy in the Africa-EU cooperation – Country report for Kenya. Available at http://trinomics.eu/wp-content/uploads/2020/12/Country-Report-Kenya_Final_20122020.pdf.

Payne, W. (2020), “Population and the environment”. Human Behavior and the Social Environment, II.

Preston, F., Lehne, J. and Wellesley, L. (2019), An inclusive circular economy, priorities for developing countries. London: The Royal Institute of International Affairs. Retrieved from https://www.chathamhouse.org/sites/default/files/publications/research/2019-05-22-Circular%20Economy.pdf.

UNEP (2019), UN calls for urgent rethink as resource use skyrockets. Available at https://www.unep.org/news-and-stories/press-release/un-calls-urgent-rethink-resource-use-skyrockets World Business Council for Sustainable Development – WBCSD (2017), CEO guide to circular economy. Available at  https://docs.wbcsd.org/2017/06/CEO_Guide_to_CE.pdf


[1] http://www3.weforum.org/docs/WEF_ENV_TowardsCircularEconomy_Report_2014.pdf

[2] http://www3.weforum.org/docs/WEF_ENV_TowardsCircularEconomy_Report_2014.pdf

[3] https://pacecircular.org/african-circular-economy-alliance

[4] file:///C:/Users/ADMIN/AppData/Local/Temp/CIP%20Report%202019.pdf

[5] file:///C:/Users/ADMIN/AppData/Local/Temp/CIP%20Report%202019.pdf

[6] https://www.industrialization.go.ke/images/downloads/Policies/Scrap_Metal_Act_2015_No1_of_2015.pdf

[7] https://www.businessdailyafrica.com/bd/corporate/shipping-logistics/porous-borders-illegal-scrap-metals-trade-3301732

[8] https://kcbgroup.com/wp-content/uploads/2021/05/KCB-SUSTAINABILITY-REPORT-2020.pdf

Authors: Dr Rose Ngugi, KIPPRA Executive Director

Ms Cecilia Naeku, Policy Analyst, Governance Department

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