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Turning trash into cash—-this blog discusses innovative solutions to waste recycling on the African continent, helping address urbanization and environmental protection issues in Africa’s cities.
Dirty Money: African startups turning trash into cash
By Andrew Larsen | Tue Apr 25 2023
African startups are getting creative to solve the waste collection issue without undermining the livelihoods of millions of trash pickers throughout the continent.
According to the United Nations, Africa generated approximately 125 million metric tons of solid waste in 2012, expected to double to 250 million metric tons by 2025. The continent, however, is only recycling 4% of this waste, on average. In response, African startups are getting creative to monetize trash and encourage recycling.
Waste management startups accounted for approximately 16.56% of all climate-related deals closed in Africa from January 2019 to March 2023, accounting for 4.67% of all funding for climate-related startups in this period. Waste management was second only to energy companies which dominated Africa’s climate-related deals, and attracted 85.12% of startup capital with a total deal volume of 67.21% in the same period.
(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)
(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)
Waste management is a key component of climate technology, contributing to the circular economy. This is a much-needed place for innovation, especially in Africa.
Anyone who has traveled to an East African city knows that waste collection remains a challenge. Governments are unable or unwilling to coordinate effective collection, and many trash pickers make a living from sifting through trash for valuables. Therefore, any potential comprehensive solution for waste management risks undermining a crucial part of the economy for some. African startups are getting creative to solve the waste collection issue without undermining the livelihoods of millions of trash pickers throughout the continent.
Innovative tech-enabled solutions in waste management can be found in major African cities, many of which incentivize recycling for consumers and connect collectors to buyers. According to Briter Bridges, as of 2020, there were 140+ waste management startups in Africa.
The impact of the rise of waste management startups is threefold:
- First, there is much to be gained financially by monetizing the nearly 250 million metric tons of waste and repurposing and recycling the significant amounts of plastics, electronics and other waste materials that are discarded annually in African cities.
- Second, repurposing and recycling waste reduces carbon emissions and decreases the impact of climate change on the continent, which stands to suffer the most from adverse climate events.
- Finally, there are a number of marginalized groups, who for decades, have worked as trash pickers in African cities. This is true of the Zabbaleen in Egypt, but the same is true in other African cities including Addis Ababa, Kampala and even Nairobi. Creating increased value for their work by repurposing and recycling waste materials creates previously unknown value for these communities, enabling them to live more financially prosperous lives.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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