Photo of Halima Awol Green Jobs in African Cities
Image: Halima Awol, credit Technoserve

Understanding Local Markets Can Create Green Jobs and Improved Livelihoods in African Cities

By Jonathan Griswold, Ethiopia Country Director, TechnoServe Tigist Bruck, Program Manager, TechnoServe

The transition to a green economy offers the prospect of an improved environment and better livelihoods. But unlocking that opportunity requires understanding local markets and economic incentives.

Understanding Local Markets Can Create Green Jobs and Improved Livelihoods in African Cities

Halima Awol, a 30-year-old mother of two, is a hard worker and does everything she can to provide for her family. However, despite her best efforts and strong work ethic, the most she was able to earn was 2,800 Ethiopian birr–barely more than $50–per month. Halima worked as a tailor at a private garment factory in Addis Ababa, Ethiopia, and her earnings in this role were not enough for her to support herself and her children, even in combination with her husband’s salary. Unfortunately, even with the meager salary, this was still the best job she could find.

Halima’s struggle is one shared by many throughout the developing world. It is predicted that the world’s population will grow by nearly two billion in the next 30 years, with more than half of this growth expected to occur across the African continent. As the populations of African countries expand, job creation often lags behind, leaving working-age people like Halima without access to the opportunities they need to earn a decent living and lift themselves out of poverty. According to the African Development Bank, roughly 10-12 million young people enter the labor force in Africa every year, while only about 3 million jobs are available.

The green economy may hold great potential to create new jobs and opportunities while supporting the transition to more nature- and climate-positive communities. But for many cities in the Global South, the question remains: how can they create these green jobs?

The experience of the Livelihoods Improvement for Women and Youth (LIWAY) program, which created new jobs and improved incomes for more than 2,200 people in the solid-waste recycling sector in Addis Ababa, Ethiopia, points to an important truth: understanding the local market and identifying the right incentives is the key to unlocking these opportunities.

Unemployment, underemployment, and pollution in Addis Ababa

Addis Ababa, one of the fastest growing cities in Africa, is also one of the cities with the greatest levels of wealth inequality in the world: despite a 23% growth in Ethiopian millionaires since 2012, roughly 60% of Addis Ababa’s population lived in poverty as of 2014, and the city’s unemployment rate was about 21%. Women and youth in particular struggle to access opportunities for decent work.

Meanwhile, as Addis Ababa’s population continues to increase, the amount of solid waste generated grows by 5% every year, overburdening the solid waste management and recycling sectors and risking contamination of waterways and other environments.

In response to these challenges, the LIWAY program—a consortium funded by the Swedish International Development Cooperation Agency (Sida) and led by SNV in partnership with TechnoServe, MercyCorps, and Save the Children International that aims to improve the incomes of 200,000 women and youth in Addis Ababa through sustainable improvements to systems that can support productive employment for these target groups—identified an opportunity to support the solid-waste recycling sector in the city.

Understand the market

A vital starting point is to study the market and learn how it works–and does not work. TechnoServe’s LIWAY team found that the city’s solid waste management and recycling system as it stood was largely unstructured and disorganized. About 35% of the solid waste generated by the city was not being collected, and was instead being deposited in open sites, drainage channels, and rivers, contributing to significant air and water pollution, as well as causing detrimental impacts on public health and wellbeing.

In analyzing the sector, the LIWAY team identified a key gap: individual waste collectors working independently and selling waste to middlemen were not collecting or earning enough to get by, while recycling firms were not receiving enough recyclable material to operate profitably. One paper recycling company needed an input of four tons of paper per day, but the current suppliers were only able to collect one ton.

However, the team recognized that this sector, despite its challenges, held significant opportunities for job creation and income generation for women and youth due to the low formal barriers to entry and strong demand for recyclable materials. Market actors just needed to close that gap.

Incentivizing participation

It is then important to determine which incentives will encourage market actors to change their behavior. The LIWAY team implemented a variety of interventions to help women and youth entrepreneurs close the gap in the waste-recycling sector. The vision was to help people create waste-recycling enterprises that would directly supply the large recycling firms.

A significant challenge was the initial hesitation of youth to become involved in these enterprises: because waste recycling was seen as a poorly compensated job of necessity, carried out by people with no other options, young people did not see it as an appealing opportunity. The program took several steps to encourage and incentivize participation. Most significant was providing youth with training and information, including factory visits and education about what other countries have been able to achieve through recycling. This opened potential participants’ eyes to the opportunities in the sector.

LIWAY identified some relatively low-cost interventions to encourage participation in the micro-enterprises. It facilitated transportation, training, and direct market linkages for these businesses, and provided training for 2,000 women and youth and PPE (personal protective equipment) for 1,250 women and youth.

The program also worked with the government to create formal incentives for young people to join. The newly constituted micro-enterprises received workspace provisions, waste paper collection subsidies of $0.03 per kilogram, and continuous technical support from the government of Addis Ababa.

Impact for green jobs

The results from LIWAY show that this kind of approach can work. Women and youth have 117 waste-collection microenterprises, which gather and sell the city’s solid waste to large recycling firms. In 2021 alone, these firms removed more than 7,000 tons of paper from the streets, and helped entrepreneurs earn more than $400,000 in sales. These micro-enterprises have improved incomes for more than 2,200 people.

Halima Awol has seen her life greatly improve. Having joined the Akaki Kaliti sub-city recycling cooperative, Halima now earns 13,000 birr, or $240 per month, nearly five times what she earned at her previous role at the garment factory. She has been better able to fulfill her family’s basic needs, and has even rented a more comfortable home.

“Initially it was hard to actively engage in the business. The household role as a woman and mother, the perception, attitude, and practice of the community regarding waste management were very challenging.” Halima said. “I am so proud that I introduced the waste collection business to more than 12 housewives in my area,” she continued. “This makes me feel more valuable and responsible in my community.”

The LIWAY program highlights how understanding the gaps in the market and the right incentives to encourage people and businesses to fill them can generate high-quality work that also boosts environmental sustainability. As the world faces the simultaneous challenges of environmental degradation, underemployment, and unemployment, identifying these opportunities is more important than ever.

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