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Abstract

Amid rising environmental degradation and resource scarcity, Africa's transition to a circular economy (CE) faces unique structural and institutional challenges. This study investigates how sustainable innovation (SI), economic policy uncertainty (EPU), and competitive market dynamics (CMD) influence CE development across 32 African countries from 2000 to 2022. Using a multi-method econometric approach, the study examines both direct and moderating effects, revealing that CE transitions are highly context-specific and non-uniform across the continent. The findings show that: (1) SI has a limited or negative impact on CE: resident patents hinder CE due to weak commercialization and lack of supportive policy, while scientific journal articles (STJA) have minimal effect due to poor industry linkages and limited practical application. (2) EPU, particularly inflation and tax revenue, plays a dual role: inflation constrains CE unless accompanied by fiscal expansion, while tax revenue consistently supports CE growth through public investment. (3) CMD, notably trade openness and unemployment, exhibits regionally diverse effects: trade openness negatively moderates the SI-CE relationship due to dependency on imported technologies, while unemployment weakens the impact of STJA, highlighting a gap between sustainability strategies and inclusive job creation. Overall, the study concludes that Africa’s CE transition requires region-specific, institutionally grounded strategies that integrate innovation, fiscal policy, and inclusive labor reforms. It reinforces the central assumption that in advancing CE across Africa, one size does not fit all.

Keywords: Africa; circular economy; competitive market dynamics; economic policy uncertainty; Sustainable innovation