One size does not fit all: sustainable innovation, economic policy uncertainty and competitive market dynamics on the circular economy of Sub-Saharan Africa
Abstract
Amid rising environmental degradation and resource scarcity, Sub-Saharan Africa's (SSA) transition to a circular economy (CE) is constrained by structural and institutional challenges. This study examines how sustainable innovation (SI), economic policy uncertainty (EPU), and competitive market dynamics (CMD) influence CE development across 33 SSA countries from 2000 to 2022. Using a multi-method econometric approach, it explores both direct and moderating effects. The findings show that SI, particularly resident patents, hinders CE due to weak commercialization and limited policy support, while scientific journal articles (STJA) have minimal impact due to poor industry integration. EPU exhibits dual effects: inflation constrains CE, whereas tax revenue supports it through public investment. CMD outcomes vary—trade openness negatively moderates the SI-CE link, while unemployment reduces the inclusive potential of STJA. Regional heterogeneity further highlights the need for tailored strategies: COMESA shows strong innovation and trade prospects; ECOWAS leverages fiscal and labor dynamics; SADC demonstrates integrated progress across innovation, policy, and trade, whereas EAC lags across all dimensions due to institutional and structural weaknesses. The study underscores that advancing CE in SSA requires differentiated, context-specific approaches that align innovation ecosystems, policy frameworks, and market incentives—affirming that a uniform strategy cannot effectively drive sustainability transitions across diverse sub-regions. • This study examines how innovation (SI), policy uncertainty (EPU), and market dynamics (CMD) influence CE. • The focus is on 32 countries from 2000 to 2022 and a multi-method approach is employed. • SI has a limited or negative impact on CE and resident patents hinder CE. • STJA have minimal effect due to poor industry linkages and limited practical application. • Other interesting findings are provided and policy implications are discussed.