Titilayo Adewumi, Regional Sales Manager, SAP West Africa, in this interview with BusinessDay’s Frank Eleanya speaks on the growing adoption of circular economy in Nigeria and Africa and the benefits to businesses.
How does the circular work?
I know a lot of people are hearing it as maybe the new buzzword but it’s been around for over a decade or so. Essentially what it is, is everything in a circular economy is meant to have value so that nothing is wasted. Basically, when we’re designing and promoting products, these products need to last so that they can be reused, repaired, and then we can also remanufacture them. I just want to kind of give you an example of the difference between a circular economy and the type of economy that we are in right now. Currently, we’re in what is called a linear economy. That’s what we’re used to. That’s how we’ve operated for hundreds of years. And it’s based on we take, we make, and we dispose, or we waste. We take materials, we manufacture them into goods, but once we’re done, we essentially waste and dispose of it.
The circular economy is different in the sense that we have these resources. We’re going to try and use them for as long as possible, get the maximum benefit out of it. After consumers are done with the resource, we’re able to regenerate or repurpose that resource at the end of their shelf life. So we’re not really disposing or wasting anything in the circular economy. In a linear economy, that’s what we’re prone to do.
What’s really great about a circular economy is we’re able to minimize the requirements for things like raw products, we’re reducing pollution, carbon emissions, etc. That’s essentially what the circular economy is.
How does SAP view a circular economy in terms of products and technology?
What we’re trying to do is similar as well. We’re able to take an application or take a solution that maybe we use for industry and we’re able to repurpose to create solutions that fit into the circular economy with regards to environmental health and safety. We’re focused on building partnerships so that we can get our concept of the circular economy out there. One of these partnerships is what we’re doing with plastic clouds, as well. We’re looking at new innovative ways that SAP can also help with reducing waste.
So what specific ways do businesses benefit from the circular economy?
We do have some short-term incentives that will help drive the change. There are indirect benefits as well. But in the circular economy, businesses are able to create employment, they’re able to innovate the way SAP has been innovating, even small businesses can innovate because they can create employment and new industries. An example is maybe a consumer packaged company, they’re taking recycled plastic pellets, and they’re selling it to the fashion industry. So we see new employment because we’re seeing new garments being made out of recycled materials.
The circular economy can help create about 6 million jobs globally. If we can get even half of that in Africa alone, that’d be impressive. So as we transition to the circular economy, we have Africa’s high population, they’ll be able to have access to recycled waste that can help really push them towards employment. Waste as a resource in Africa is still new. It is not every business that is aware of how they can use waste as a resource. But we see about $8 billion being generated on the continent alone if we’re able to transition to the circular economy.
There are lots of opportunities for waste management systems; businesses can spin off new revenue-generating ideas just from a waste management system. Before Ghana joined the National Initiative for the Global Plastics Action Program, they were producing about 1 million tonnes of plastic waste per year, and they had only 10 recycling points in Accra alone. After joining the partnership, they were able to increase from 10 recycling points to 116 recycling points in Accra alone.
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On the African continent, we’re seeing benefits to the consumer packaged goods companies, because they can also reduce costs that are associated with their raw materials. They get incentives to also use ethically sourced products and more recycled materials throughout the entire lifecycle and value cycle of their products.
Are there cost implications that come with the circular economy like deploying infrastructure?
So in terms of cost, every industry is different. But what’s happening with maybe the World Economic Forum in terms of the partnership that exists, shows there’s lots of funding that’s been put into these businesses and even at national levels. For businesses that decide they want to move to a circular economy, there is funding available to offset some of these costs.
There are also ways to partner with organisations like the World Economic Forum, and with technology vendors like SAP coming on board to help with some navigating policies. We’re doing some great things in Ghana. Next will be in Nigeria, and then Kenya and South Africa as well. There are lots of processes that we as SAP will take on from the businesses so you don’t have to invest too heavily in those costs.
What’s your view about Africa’s developmental challenges posing a roadblock to adopting a circular economy?
I do understand that many economies in Africa may have more challenges in terms of Co2 emissions, but I don’t see it putting constraints. There are some industries like the petroleum industry that are seeing less growth which is transitioning to the circular economy. Coming home to Nigeria, there is a link between, Co2 emissions being tackled in certain ways and the health status of Nigerians. It’s not just the economic impact. There’s also a social impact that the President, the Minister of Environment, and the Minister of Health are also considering. As they say, “Let’s move Nigeria to this circular economy.”
Do you think that the circular economy is a faster way of including more people in paid employment than what we’re currently doing?
I do agree with that, because of the high population that we have. We have a lot of unemployment as you mentioned. And I did say that we’re looking at about 6 million jobs being created globally as we transition to a circular economy. We don’t have a fantastic waste management practice in Nigeria, so imagine the jobs that can be created. Imagine the sort of new fields that can open up. Just so you know, a decade ago we were traditionally having CIOs that were leading the pack of technology. Now, you know, we have CTOs, CXOs, etc. There are so many new titles coming out with the change and development of technology. And I would say by 2030, as waste management practices, circular economy become more prevalent in Nigeria, you’ll also have new employment and new titles and new job roles. It will be the case of going to school to become a doctor or a lawyer.
So what are the policies that need to be in place for this to happen?
The policies are there, but nobody’s enforcing them. There needs to be a policy that is laid out at the very foundation so that we can create these new industries. There has to be an implementation plan for plastic management policies. There needs to be more than just a communication strategy. That’s what we see right now. We as individuals need to change our behaviour on how we transition into the circular economy, manage plastics, and view waste.
Policies have to be industry-based. For example, for a beverage company or a retail outlet, there needs to be a portion where you’re able to collect plastics from your consumers. If you sell X amount of recyclable products, you need to be able to collect Y amount
These are things that we can work with an OEM like SAP because we do this for other countries as well. We are engaged in Singapore and South Africa. We’re putting together and helping companies and governments put together policies that make sense for the current situation that the economy is in. I don’t think it’s right to go ahead and have a full-blown policy as you see in Europe, we’re not ready yet. But we do need to start. And then we’ll now have to start picking up the pace because maybe our border neighbours have really gotten on board with the circular economy momentum. And this is the reason why SAP uses technologies like microplastic clouds and what we’re doing with fuel source management. We come on board to show you how this technology will add value and how we can infuse policies to it.
Is a Lagos without trash possible? How can the state monetise its waste?
The answer is yes, it is possible but it comes with a mindset shift. You have great businesses like Wecyclers, Dow Chemical, some of the partners that we’re working with that are putting and monetizing waste. So a world without waste is possible in Nigeria; it’s definitely possible in Lagos. but you first have to change your mindset and show that it is possible to make some money.
Take an N50 plastic bottle, if you’re able to show the locals that if you’re can return this plastic bottle you will make 20k, people will join. You then take the plastic bottle and show through dashboards and a marketplace that the plastic bottle has now landed into a different recyclable product or has even been moved through the value chain and it’s now a t-shirt or face cap, more will join.
What’s SAP’s plan on the circular economy in Nigeria?
In Davos 2020, our CEO Christian Klein did announce that we were going to join the World Economic Forum’s partnership with the Global Plastics Action Program. And what happens is at the local level, every country is able to form a subset which is the end part of the National Plastics Action Program. SAP has been asked to be part of the advisory council for Nigeria and we have accepted. So we are working with the Nigerian government and with certain influencers and stakeholders to try and help build this committee for the circular economy.
We’re also trying to repurpose some of our solutions. I mentioned the pilot that’s happening in Ghana with a waste picker. We’re trying to build a marketplace where waste pickers are able to have technology backing them and enable them to pick waste from the landfill. We’re able to take and pay them a fair wage for the plastics that they have collected. And all of this is running on the SAP back end.
