Nigeria, with a population exceeding 200 million, is one of the largest producers of solid waste in Africa. Although, many may flee from the topic saying it’s “dirty business,” some brave entrepreneurs have said it’s a “Gold mine.”
Solid waste management has become a pressing environmental challenge faced by urban and rural areas in Nigeria. This situation is further compounded by the reckless disposal of Municipal Solid Waste (MSW) leading to blockage of sewers and drainage networks and choking of water bodies.
Interestingly, Lagos is a model for other states in the country when it comes to municipal waste management. But the issue is still a big challenge for the Lagos State Waste Management Agency (LAWMA) to manage alone. Hence, the need to engage the services of private waste firms and other franchisees to reduce the burden of waste collection and disposal.
When a problem becomes an opportunity
Nigeria generates more than 32 million tons of solid waste annually, out of which only 20-30% is collected. Herein lies the opportunity. The waste management sector remains an untapped gold mine, with enough room for massive participation, investment and expansion. To examine the subsector of plastics waste management, Nairametrics caught up with an entrepreneur and a scholar who is conducting extensive research into municipal waste management and who is also the founder of a recycling company based in Lagos.
Isaac Jacob Omosimua is the co-founder of CrichWeather-Recycling. In this article, he takes Nairametrics on a tour of the recycling and waste-to-wealth sector.
“The recycling market is profitable to the environment and the economy at large. Recycling is in similitude with “reuse.” Naturally, items with no value are often discarded or trashed by their owners,” he said, adding that the improper disposal of these items poses a risk to the environment and the economy.
“It is safe to say that recycling is a potential source of national development via improved environmental quality and employment creation, thus, enabling the attainment of some of the sustainable development goals; specifically goals 3, 8, and 13 of United Nation’s Agenda 2030 which are to promote healthy lives and well-being, promote decent employment, and take action against climate change and its impact respectively,” he said.
Isaac explained that in the recycling market, there is a value chain with waste pickers or scavengers at the fore. For example, the waste plastic Polyethylene (PE) and Polypropylene are sold by the pickers to the collectors for less than NGN100/kg (that is, NGN100,000 for a ton). The waste collectors sell to the processors for about NGN170/kg (that is, NGN170,000). The processors shred and pelletize, and sell to consumers at a price of about NGN280/kg, and N500/kg respectively. From there on, the plastic is made into various objects for end users.
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He admits that this is a pretty profitable business venture for the savvy entrepreneur looking to venture into unpopular business areas with immense and largely untapped potential, as there is a huge customer base for pelletized plastic.
When probed on how the economic crunch and particularly the forex crises of the past few months have affected the recycled plastics business, he says, “Generally, the demand for and prices of recycled raw materials has increased due to the increase in the cost of imported raw materials, so business looks better for those who were in the business before the crises despite the increase in the cost of transportation which is as a result of an increase in the cost of trucks and diesel.
“The current challenge for new entrants, especially processors, is an increase in the cost of machinery.”
Asked if there are special qualifications or expertise required to venture into the sector, Jacob insists that qualifications and expertise are dependent on where a new entrant wishes to participate.
“It is important to have practical knowledge of recycling before delving into the business. For academic qualification, it depends on the stage in the recycling chain where a player wants to operate. There is no qualification needed for waste picking, collection and sale, however, processors may need to have some technical knowledge to enable them operate equipment and carry out simple troubleshooting operations,” he said.
With regards to support from the government, Jacob admitted that although government impact is felt in the sector, there is room for improvement.
“The government is currently helping SMEs in general through the foreign exchange payment for small-scale importation scheme introduced by the Central Bank of Nigeria (CBN) in the year 2017. Companies can access 20,000 dollars quarterly at the official exchange rate for the importation of economy-boosting items, for example, recycling machines. However, there is room to do more,” he said.
He added, however, that he has been unable to access any loan since the inception of this business which has paid between 15 to 50 persons in the last 3 years.