Nigeria’s circular economy is set to receive a significant boost following the signing of an agreement on a sustainable plastic value chains project by the country’s Federal Environment Ministry, the Japanese Embassy in Nigeria, and the UN Industrial Development Organisation (UNIDO).
The $2.8m agreement will “support government efforts to develop sustainable plastic waste management through the promotion of circular economy practices and to contribute to the inclusive and sustainable industrial development of Nigeria”, according to a press release.
Nigeria generates large quantities of solid waste every year. A Unido report reveals that the country creates about 32 million tonnes of solid waste annually, of which 2.5 million tonnes is plastic waste. On top of that, the report states that Nigeria “is among the top 20 countries that contribute 83% of total volume of land-based plastic waste that ends up in the oceans”.
The sustainable plastic value chains project in Nigeria will, it is hoped, reduce the leakage of plastic waste into the Atlantic Ocean, while creating economic opportunities.
Business opportunities in Nigeria’s waste management sector
“The large volume of plastic waste being generated in Nigeria presents circular economic business opportunities across the plastic value chain, which should be properly harnessed for job/wealth creation, the establishment of micro, small and medium-scale enterprises, private sector investment including foreign direct investment FDI in addition to preventing/reducing plastic leakages to the environment,” said Sharon Ikeazor, Nigeria’s minister of state for environment, at the signing ceremony of the project, as reported by Science Nigeria.
When it comes to investments linked to the circular economy in Nigeria, GlobalData’s FDI Projects Database has already recorded come activity. Fan Milk, which is a Ghana-based producer of fruit, milk and dairy-based food and drink products, and a subsidiary of Sofina, a Belgium-based holding company, has opened a new water treatment plant in Ibadan in south-west Nigeria. The plant is looking to lower Fan Milk’s carbon footprint through reducing chemical and steam consumption, minimising water demand and wastage in the factory, and using less wash time in the production line.
There are many other opportunities that exist in the Nigeria’s waste management industry, however. Daniel O Akibor, CEO at Port Harcourt-based Throway Waste Management, says: “Young entrepreneurs and start-ups are bringing in innovation and improving on the less-effective methods being used. Within the next two decades waste management will become one of the most profitable ventures in Nigeria in particular, and Africa at large.”
FDI in waste management and recycling in Africa
Foreign investors seem to share Akibor’s view about waste management presenting a potentially lucrative opportunity in Africa, given the projects that have been announced or opened in the continent over the past years.
More specifically, GlobalData’s FDI Projects Database has tracked seven cross-border greenfield waste management and recycling projects, announced or opened, in sub-Saharan African throughout 2019 and 2020. Among these projects, the majority are new projects located in Kenya, Liberia, Tanzania and South Africa, in addition to the Fan Milk project in Nigeria.
Kenya has attracted three projects, from which China has been the source country in two (related to remediation and waste collection, treatment and disposal activities) and the UK the other in a water collection, treatment and supply project.
Tanzania has attracted one project from the India-based lead metal recycling company Gravita Group. The company has invested $1.31m to establish a new subsidiary and recycling plant called Gravita Tanzania. In South Africa, Australia was the source country for a remediation and waste collection, treatment and disposal activities project.
In Liberia, two companies have combined to build a new wastewater system in Harbel, near the capital city of Monrovia. These companies are Firestone Liberia, a Liberia-based natural rubber-producing company, and a subsidiary of Bridgestone, which is a Japan-based automotive and truck parts manufacturer.
The shortfall in Africa’s infrastructure is well documented, but the headlines tend to focus on the need for new roads or electricity grids. A productive circular economy is crucial for both Nigeria and the wider continent, however, and it is here, and through waste management in particular, that foreign investors can take advantage of some potentially lucrative opportunities, while boosting their ESG credentials.