How Ethiopia’s Circular Economy is Turning Waste into Job Opportunities
The circular economy has provided an opportunity for Ethiopian entrepreneur Sheshetu Diriba to become financially self-sufficient. She’s not the only one.
Sheshetu Diriba looks out with pride from the front door of her paper collection business, located near the airport in the Ethiopian capital of Addis Ababa. Not only does the micro-enterprise provide Sheshetu, 37, and her business partners with a sustainable livelihood, it’s also creating better opportunities for economically vulnerable members of the community.
Becoming a Circular Economy Entrepreneur
Four years ago, however, Sheshetu was in a very different situation. She had lost her job in a hotel, and without any source of income, she depended on the support of her extended family to survive.
“I went to the local government office and said, ‘If you have any job, let me do it,’” she recalled. The office said it had an opportunity available in paper collection–and so began Sheshetu’s journey as a circular-economy entrepreneur.
The Missing Links in the Recycling Supply Chain
The circular economy aims to preserve and restore natural resources by sharing, reusing, repairing, and recycling materials, rather than discarding them. In a city like Addis Ababa, where the population and total consumption are growing quickly, there is both an enormous need to find sustainable solutions for solid waste management and an enormous opportunity in the transition to a circular economy.
The Livelihoods Improvement for Women and Youth (LIWAY) initiative, funded by Sweden and the Embassy of the Kingdom of the Netherlands (EKN) and implemented by a consortium of partners that includes TechnoServe, SNV, Mercy Corps, and Save the Children, is working with entrepreneurs like Sheshetu to deliver on that opportunity.
Through the LIWAY program, TechnoServe identified a significant gap in the supply chain for recycling paper and plastic. While Addis Ababa had large recycling businesses and thousands of independent collectors picking up waste, there were not many aggregators to link the two groups. As a result, the waste collectors had few profitable places to sell the paper and plastic they gathered. Meanwhile the large recyclers could not access a reliable supply of recyclable material, frequently forcing them to operate at just 30-50% of their capacity.
The Role of Micro and Small Businesses in Recycling
TechnoServe partnered with the Addis Ababa Cleansing Management Agency–the government body tasked with managing solid waste in the city–to support the creation of micro-enterprises that would fill this gap by purchasing paper and plastic from street-level waste collectors, aggregating and sorting it, and delivering it to recycling businesses. The initiative linked prospective micro-entrepreneurs in small groups, provided a plot of land and storage containers to launch the enterprises, and delivered training on running a successful waste-aggregation business.
Through the initiative, Sheshetu was connected to five other entrepreneurs who would become her business partners in the micro-enterprise. Running the paper-aggregation business was difficult in the beginning. With training, however, the prospects for the micro-enterprise improved.
“At first, we did not sort or grade the paper, and we let it get dirty on the floor. Now we’ve learned how to handle it properly so that we can sell it at a higher price,” she said. She also received training on record-keeping and other core business skills.
Through a networking event organized by LIWAY, Sheshetu and her partners met a recycling company that was struggling to source enough waste paper and signed an agreement to deliver a truckload of recyclable paper each week. To meet that demand, each day Sheshetu and her partners collect 250 kilograms of waste paper directly from institutions and offices and purchase 100 kilograms from 15 daily waste collectors.
Micro-enterprises like Sheshetu’s are flourishing across Addis Ababa. With the support of LIWAY, more than 580 waste-collection micro-enterprises have generated aggregate sales of nearly $10 million. In 2023 alone, these businesses collected and aggregated more than 41,800 tons of paper and plastic and strengthened the supply chains of 20 recycling companies.
The Ripple Effects of Circular Economy Entrepreneurship
For Sheshetu, launching one of these micro-enterprises has had a transformational impact on her life. In 2020, she was dependent on her family for her sustenance. Today, the $100 she earns from the business each month means that she can not only pay for her own rent and food, but she can also send money to support her nephews living in the countryside outside the capital.
Her business is also improving the lives and livelihoods of others. Muluken Yohannes is one of the 15 daily pickers who deliver paper to Sheshetu. The 20-year-old migrated to Addis Ababa from southern Ethiopia because his parents couldn’t afford to support him or pay for his education any longer. He is working to save enough money to return home, finish high school, and study economics at university.
Muluken has been collecting waste paper for about five months and currently sells his entire daily haul to Sheshetu. He says he does this for two reasons. The first is the business’s proximity to the neighborhood where he collects waste: he delivers about 10 kilograms per day, so carrying that over a long distance would be time-consuming and very physically demanding.
He also knows that Sheshetu–unlike some other aggregators–will buy all his paper every day, which she is able to do because she has a guaranteed off-take agreement with the recycling company. The growth of Sheshetu’s business is making Mulukunen’s dream more attainable.
Sheshetu is proud of her accomplishments and her journey as an entrepreneur. “Without challenge, there is no success,” she said. She would like to purchase a vehicle to reduce the business’s transportation costs and hopes to expand outside the city in the future. “I will achieve more.”
