Green business opportunities in Africa are abundant, says UNEP study

by MMC
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Addis Ababa, August 17, 2023 – Africa’s private sector can strengthen its green agenda and generate higher GDP, higher per capita income, create tens of millions of jobs and foster collaboration between governments, businesses and local communities, study finds . depth study released today by the United Nations Environment Program (UNEP).

THE African Environmental Outlook for Business is launched as 54 African environment ministers gather in Addis Ababa for the 19th session of the African Ministerial Conference on the Environment (AMCEN). He recommends that businesses adopt a holistic approach rooted in profit, people, planet, prosperity, peace and partnerships.

Elizabeth Mrema, Deputy Executive Director of UNEP, said: “This report shows that policymakers can create an environment conducive to investments that respond to the triple planetary crisis by adopting strong regulatory frameworks, investing in research, innovation and education, as well as the promotion of public-private partnerships and foster collaboration between governments, businesses and local communities.

The report presents a series of success stories of green businesses today, as well as data on growth potential across all sectors.

Agricultural and private sector investments in nature:

  • Transition to sustainable agriculture, which currently contributes around 17 percent to sub-Saharan Africa’s GDP. Adopting organic farming, precision agriculture and agroforestry are some of the approaches that can improve productivity while minimizing negative impacts on ecosystems and avoiding food insecurity and loss of biodiversity.
  • Digital technologies in agribusiness offer a $1 trillion market to feed the continent’s growing population, estimated to reach 2.5 billion by 2050.
  • Combating soil erosion can have net benefits in nutrients – such as nitrogen, phosphorus and potassium – worth $62.4 billion per year.
  • Nature restoration can generate $10 trillion in business value and create 395 million jobs by 2030.

The blue economy and ecotourism:

  • Through research, innovation and the management of aquatic ecosystems, the resilience of the blue economy – which is expected to generate US$576 billion and 127 million jobs by 2063 – must be maintained in the face of overfishing, pollution and climate change.
  • Marine and coastal tourism presents enormous opportunities for sustainable development in Africa, with potential value added of over $100 billion by 2030.

Climate-smart opportunities for a transition to net zero emissions:

  • Africa can become a pioneer in renewable energy solutions, with abundant solar, wind, hydroelectric, biomass and geothermal resources that could contribute to a 6.4% increase in GDP between 2021 and 2050. Ocean renewable energy represents a vast untapped resource for Africa. with the potential to generate between 100 and 400 percent of current global energy demand.
  • Companies in the energy efficiency sector can provide products and services, such as efficient lighting systems, smart buildings and industrial processes.
  • An annual climate finance gap of $213.4 billion offers innovative investors a chance to make an impact by strengthening Africa’s climate resilience.
  • Significant reserves of critical minerals like copper, graphite, lithium, molybdenum, nickel, zinc, bauxite, cobalt, manganese and platinum – managed responsibly – make Africa essential for vehicles electricity, photovoltaic solar cell technology and wind turbines.
  • “Cool roof paint” can reflect up to 95 percent of solar heat and the need for air conditioning; investments in clean cooking energy sources can support 900 million people (leading to poor health and deforestation today), and the African LED lighting market could almost double by 2028, to reach 5.49 billion dollars.

Profitable paths to circularity:

  • Opportunities to promote sanitation, combat plastic waste, recycling infrastructure, sustainable packaging, e-waste collection and refurbishment.
  • In the food and beverage industry, efficient supply chains and reduced food waste can improve resource utilization while meeting growing food demand.
  • Plant proteins and food safety systems can further drive growth and sustainable practices.
  • European Union funding SWITCH Green Africa Initiative and the SwitchMed programs, which illustrate the viability of the transition to a circular economy by benefiting more than 3,000 people. MSME and eight sub-Saharan African countries in agriculture, integrated waste management, manufacturing and tourism.

The African Continental Free Trade Area (AfCFTA):

  • The rapidly growing fashion and textile sector in sub-Saharan Africa is valued at approximately $31 billion and presents opportunities such as sustainable material sourcing, recycling, ethical manufacturing, rental and sharing models and consumer education.
  • The African automotive market is dominated by used vehicles, paving the way for companies to thrive in vehicle recycling, remanufacturing, battery recycling, shared mobility solutions, repair and maintenance services , circular supply chain management, as well as training and skills development.
  • The financing gap for environmentally sound technologies (ESTs) must be filled. In 2020, only $6.07 billion flowed to the continent for green technologies, while the global value of exported technologies reached $1.17 trillion.
  • A pipeline of 360 ongoing sustainable infrastructure projects worth $100 billion across sectors – including energy, information and communications technology (ICT), logistics, mining and construction (from 2022) and additional interim projects in the same sectors valued at $257 billion, demonstrate the continent’s diverse investment opportunities in the transition to net zero emissions.

The African voluntary carbon market:

  • Despite its immense potential, Africa uses only a fraction of its carbon credit capacity concentrated in just five countries, due to fragmented projects, a scarcity of large-scale developers, regulatory uncertainties, credibility of certain credits and a fair distribution of value.
  • Africa’s untapped potential is estimated at around 2,400 tonnes of CO2 equivalent (MtCO2e) per year. This could generate an additional 400 MtCO2e per year, valued at around US$7 billion per year by 2030.
  • Initiatives such as the African Carbon Market Initiative (ACMI) and the Task Force on Scaling Voluntary Carbon Markets (TSVCM) recommend regional and global actions to increase the supply and demand of high integrity carbon credits.

The report highlights the unique challenges facing many African economies, including limited investment, institutional capacity, scalability, high transaction costs, transport impacts, and access to and affordability of electricity. Reducing upfront costs and promoting energy-efficient solutions as well as innovative financing mechanisms must all be priorities for policymakers.

“Africa not only faces incredible challenges around climate change, nature loss and pollution, but it also has a uniquely dynamic economic landscape, a young population and opportunities for decarbonization, digital transformation and leveraging an environmental, social and governance (ESG) framework for sustainability. in the business sector,” said Rose Mwebaza, UNEP Director and Regional Representative for Africa. “With this new report, we hope to inspire African entrepreneurs and businesses, especially bold pioneers, to engage in green growth and contribute to the Sustainable Development Goals. »

NOTE TO EDITORS

About the United Nations Environment Program (UNEP)

UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in environmental protection by inspiring, informing and enabling nations and people to improve their quality of life without compromising that of future generations.

About the African Ministerial Conference on the Environment (AMCEN)

The African Ministerial Conference on the Environment (AMCEN) was established in December 1985, following a conference of African environment ministers held in Cairo, Egypt. Its mandate is to advocate for environmental protection in Africa; ensure that basic human needs are adequately and sustainably met; ensure that social and economic development is achieved at all levels; and ensure that agricultural activities and practices meet the food security needs of the region.

For more information please contact:

Tom OgolaPublic Information, Communication and Awareness Unit, UNEP Africa,

News and Media UnitUnited Nations Environment Program

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