How tech is helping Egypt’s informal recyclers build a circular economy

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Laila Iskandar, Founder and Member of the Board, CID Consulting

• Cairo’s informal waste collectors (zabbaleen) are a distinctive part of the city’s street culture and currently collect 50-60% of its waste.
• A group of multinationals, backed by Egypt’s government, have created a plastic recovery scheme which rewards collectors through digital credits.
• This scheme demonstrates how a responsible recycling model can enable social inclusivity and be replicated elsewhere.

For more than 70 years, Cairo’s zabbaleen (Arabic for waste collectors) have been gathering and recycling the city’s rubbish with an efficiency that would be the envy of most professional waste management companies. Yet their pivotal role in the city’s circular economy has gone largely unrecognized.

Now that is starting to change. A new scheme backed by some key multinational corporations and supported by the Egyptian government is putting the zabbaleencentre-stage and empowering their informal businesses, with the help of simple digital technology.

The initial target is plastic waste, an environmental scourge that now accounts for 12% of all municipal solid waste worldwide.

Understanding Egypt’s plastic problem

The zabbaleenhave a unique heritage. Arriving in Cairo in the 1940s, their small carts have collected waste door-to-door, becoming a feature of a metropolis that now boasts a population of more than 20 million. They currently collect 50-60% of the city’s waste. But the task of keeping up with the rubbish is daunting, with waste generation in the Middle East and North Africa forecasted to double by 2050.

The zabbaleen are not perceived by the public as recyclers, despite the fact this army of more 50,000 waste processors, 150,000 collectors, sorters, traders and truck drivers, recycle 80% of everything they collect. They have alwaysviewed their work as a process of “harvesting” materials, rather than “managing” waste.

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The plastic trash that is strewn in the streets of Cairo and the river Nile has become a growing headache not just for the government but for the big corporations whose logos are plastered over its packaging. These companies are under severe pressure from stakeholders to do more to tackle the problem, including having to meet new and demanding targets set by the European Union for recycling single-use plastics by 2025.

With a track record of recycling 80% of everything they collect, Cairo’s army of more 50,000 waste processors, 150,000 collectors, sorters, traders and truck drivers, certainly have the skills to handle the city’s plastic waste mountain.

The problem is that the existing market structures routinely fail to reward them adequately for their labour, leaving a gap in recycling that is paid for in environmental degradation. As a result, plastic litter has been increasing – and even when it is collected, there remains a deficit in processing it.

Government-backed scheme to recover packaging

However, there is now a mechanism to meet the challenge in Egypt, thanks to a large-scale plastic recovery scheme co-designed by CID Consulting and Nestle (the world’s largest food and beverage company) as part of its drive to make 100% of its packaging recyclable or reusable by 2025.

The scheme, which started in 2019, initially incentivizes the zabbaleen to boost their collection of PET plastics, but in future it will include all post-consumer packaging. Significantly, the venture is now gaining traction, with Nestle’s lead being followed by Pepsico, which signed up in January in 2021, and Unilever set to follow in June. Egypt’s Al Ahram Beverages will join in 2022.

Companies responsible for producing plastic waste pay … electronically for each consignment that is collected and sent for recycling. —Laila Iskandar, CID Consulting.

Crucially, the scheme has the backing of the Ministry of the Environment, which in March 2021 signed the Egyptian Plastics Pact with companies, in a move that effectively validates this model as a socially inclusive Extended Producer Responsibility (EPR) system, as mandated by the country’s new Waste Management Law 202 of 2020. That same law also offers social protection to Egypt’s informal garbage collectors by assigning them the occupational name of “recycler”, which will eventually appear on their national ID papers.

The initiative uses a reverse credit approach under which companies responsible for producing plastic waste pay the collectors, sorters, traders, and processors electronically for each consignment that is collected and sent for recycling. Every transaction along their intricate, established value chain is logged and confirmed via SMS message, and recyclers are paid through e-wallets in their local neighbourhoods. This creates a financial reward mechanism that leads to both a cleaner environment and additional resources for Cairo’s recyclers to spend on their families’ wellbeing, health and education.

Measuring the value of waste

Developing the system required an in-depth analysis of the complex value chain of plastics in the Egyptian economy – both formal and informal. To come up with a fair price, it was necessary to identify the role of all the actors along the value chain and calculate the value each added, while allowing for transaction costs as well as environmental and social impacts.

In the case of PET, the value of managing waste from consumer to reprocessing plant was calculated at $64 a tonne. That figure is obviously commodity-specific, but the same approach could be adapted for different materials and other circular economy partners, as well as different regions.

No need to reinvent the wheel

Of course, Cairo is not alone in having a vast workforce of informal waste collectors. Around the world, an estimated 20 million people earn a living as waste pickers – collecting plastics, aluminium and other materials and selling them to recycling facilities.

This distinction characterizes all informal waste workers in emerging and developing economies. Their livelihoods and survival depend on creating new markets, new trading partners, new sources of materials, new processing technologies and new manufacturers in the formal recycling industry.

That desire to create new markets can be harnessed with tech that builds on this informal system easier for its users. After all, the reverse credit system was designed for Cairo with this truth in mind: often the best road to a circular economy is neither the newest nor the most advanced technologically.

Indeed, it is crucial to respect existing trading relationships when the work of informal collectors is brought into the circular economy. Past experience has shown that any interference or disruption to established trading patterns can lead to a distortion of the market, a loss of livelihoods and, most importantly, a loss of trust.

The task ahead for companies, governments and consumers to deliver on the dream of a truly circular economy is certainly formidable. But one thing is clear: in the developing world, it will only become a reality if all sides recognize and reward the vital work of informal waste workers in keeping the streets clean from Cairo to Cape Town, and across Asia and Latin America.