Journal of African Development

The circular economy (CE) has emerged as a transformative approach to sustainable business, aiming to reduce waste, optimize resource efficiency, and foster long-term economic growth. Unlike the traditional linear model of production and consumption, CE promotes closed-loop systems that minimize waste and encourage recycling, reuse, and sustainable product design. This study evaluates the economic and environmental impact of circular business models (CBMs) across multiple industries, including manufacturing, retail, and services. It seeks to determine whether CBMs enhance financial performance and contribute to sustainability goals.

Using a mixed-methods approach, this research collects both primary and secondary data to assess financial performance indicators, waste reduction metrics, and carbon footprint reduction across industries. Quantitative analysis includes regression modeling of cost savings and revenue increases associated with CBM adoption, while qualitative insights from industry experts highlight challenges and opportunities in transitioning to circular models.

Findings suggest that CBMs significantly improve profitability through cost savings and new revenue streams while simultaneously reducing environmental impact through lower resource consumption and waste generation. However, the extent of these benefits varies across industries due to factors such as regulatory frameworks, technological constraints, and consumer acceptance. Manufacturing firms experience the most substantial gains, while service-based industries face challenges in implementing circular strategies.

This study contributes to the broader discussion on sustainability and business innovation by providing empirical evidence on the effectiveness of CBMs. It offers practical recommendations for businesses, policymakers, and stakeholders to accelerate the transition toward circular practices. Future research should explore long-term economic impacts and policy frameworks that support CE adoption globally.