By Sharon Atieno

Though Africa is disproportionately vulnerable to the triple planetary crisis of biodiversity loss, climate change and pollution, the continent offers numerous opportunities for environmentally friendly business ventures that could spur economic growth.

This is according to the Africa Environment Outlook for Business launched during the 19th session of the African Ministerial Conference on the Environment (AMCEN) in Addis Ababa, Ethiopia.

The report published by the United Nations Environment Programme (UNEP) classifies these opportunities into three broad categories including climate-smart opportunities for a net-zero transition, nature-based solutions for climate adaptation and sustainable resource management, and circular economy opportunities.

Climate-smart opportunities for a net-zero transition

According to the report, Africa’s reserve of significant vital minerals such as platinum, manganese, cobalt and bauxite among others presents exceptional opportunities for climate-smart value chain development.

Additionally, the report notes that while renewable energy projects focusing on solar, wind, geothermal, and bioenergy have experienced rapid growth in Africa, green hydrogen also offers excellent potential.

“Africa could emerge as one of the most cost-effective regions for hydrogen production, with the capacity to generate a staggering 5,000 Mt annually at less than $2 per kilogram,” the report says.

Further, innovative business models and cost-effective investments in other sustainable products, such as energy-efficient cookstoves, innovative lighting solutions and ‘cool roof paint’, offer low-hanging fruits for green businesses.

The African LED lighting market, for instance, is expected to increase from $3.71 billion in 2023 to $5.49 billion by 2028, presenting a lucrative opportunity for businesses in the lighting sector.

Nature-based solutions for climate adaptation and sustainable resource management

The report finds that transitioning to sustainable agriculture practices such as embracing organic farming, precision agriculture and agroforestry can minimize negative impacts on ecosystems and prevent food insecurity and biodiversity loss.

With land degradation and deforestation posing a threat for the continent with about 75% of deserts and drylands experiencing degradation, substantial investments in restoration efforts are crucial. Restoring nature can unlock a business value of $10 trillion and create 395 million jobs by 2030, the report notes.

The report also finds that action to combat soil erosion, for instance, could result in net benefits in vital nutrients such as nitrogen, phosphorus and potassium, worth $62.4 billion annually in purchasing price parity.

The report adds that by incorporating sustainability principles in marine and coastal tourism, the sector can build resilience and contribute to long-term economic growth while conserving marine biodiversity. Various ecotourism business opportunities in Africa range from wildlife safaris and conservation tourism to sustainable agriculture and culinary tourism, offering unique experiences that capitalize on the continent’s rich wildlife.

With strategic investments in ports, shipping technology and maritime education, the marine transport sector is expected to contribute $48 billion by 2063 in global trade.

According to the report, ocean renewable energy also presents a vast untapped resource for Africa with the potential to generate between 100 to 400 percent of current global energy demand. Some countries have already begun incorporating blue energy into their energy mixes, such as Ghana’s exploration of wave energy and Mauritius’ investment in floating solar photovoltaics.

Circular economy opportunities

The report notes that Africa’s circular economy presents a wide range of opportunities across sectors, promoting resource efficiency, waste reduction and sustainability.

It shows that tackling plastic waste through recycling infrastructure and sustainable packaging, and capitalizing on the growing demand for electrical and electronic equipment (EEE) with e-waste collection and refurbishment services, businesses can find lucrative pathways.

In the agro-food industry, circular economy approaches, such as efficient supply chains and food waste reduction, enhance resource utilization while meeting the continent’s growing food demand.

The report also notes that exploring plant-based proteins and implementing food safety systems can further drive growth and sustainable practices.

In the water and sanitation sector, the report finds that investment opportunities exist in innovative infrastructure, water conservation and resource recovery from wastewater. Also, smart water management systems can improve efficiency and reliability in delivering these vital services, supporting sustainable development.

In the fashion and textiles sector, opportunities abound in sustainable material sourcing, recycling, ethical manufacturing, rental and sharing models, and consumer education, fostering a circular and eco-conscious fashion industry.

With the African automotive market being predominantly dominated by used vehicles, businesses can thrive in vehicle recycling, remanufacturing, battery recycling, shared mobility solutions, repair and maintenance services, circular supply chain management, and training and skill development, transforming the automotive industry toward sustainability.

The report notes that closing the gap for financing environmentally sound technologies (ESTs) will enable adoption, offering superior environmental performance compared to other technologies.

“This report shows that policymakers can create an enabling environment for investments that address the triple planetary crisis by adopting robust regulatory frameworks, investing in research, innovation, and education, as well as promoting public-private partnerships and fostering collaboration across governments, businesses and local communities,” Elizabeth Mrema, UNEP Deputy Executive Director.

The report notes unique challenges to many African economies, including limited investments, institutional capacity, scalability, high transaction costs, affect transportation, and access to and affordability of electricity. Reducing upfront costs and promoting energy-efficient solutions, and innovative financing mechanisms must all be prioritized by policymakers.

“Africa faces not just incredible challenges on climate change, nature loss, and pollution, but has a uniquely dynamic economic landscape, youthful demographic, and opportunities for decarbonization, digital transformation and for 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 audacious first movers, to engage in green growth and contribute to sustainable development goals.”