South Africa has immense bioeconomy potential if we look at its natural endowments alone. As one of the most biodiverse countries on the planet, it is full of genetic resources for biotechnology. Its agricultural sector comprises around 12% of its GDP, offering a large, ready supply of potential feedstock.
Yet South Africa has struggled to encourage higher-value biobased industries. This is not for want of political ambition and forms part of the country’s broader difficulties in overcoming its middle-income status.
Eleven years on from the release of its national Bioeconomy Strategy, how has South Africa progressed in building biobased capacity? And what lessons do South Africa’s challenges hold for other economies?
Higher-value ambitions
South Africa, governed since 1994 by the African National Congress (ANC) party, has long held ambitions for a higher-value bioeconomy. These were most clearly expressed in its 2013 Bioeconomy Strategy paper, which signalled the ANC’s commitment to the sector.
The knowledge-based bioeconomy refers to biobased industries led by scientific research to produce complex, highly processed goods from biological materials. These kinds of products tend to fetch higher prices on the market than basic agricultural commodities and lower-value biobased materials, the mainstay of South Africa’s bioeconomy currently.
Apart from this, the plan was agnostic on what products it wanted to see ramp up. Its ambitions were broad, ranging from more mature biobased industries like crop-based biofuels to less commercialised sectors like industrial biotechnology. Bioprospecting also featured, especially for pharmaceuticals – something that capitalises on the country’s unique levels of biodiversity.
An economy built on biodiversity
Another national bioeconomy plan lays out how the country should generate income from its biodiversity and natural ecosystems specifically: the National Biodiversity Economy Strategy (NBES) of 2016, updated in 2024.
The plan aims to commodify its unique biological resources while also conserving them, ensuring that the income that results returns to South Africans rather foreign multinationals.
President Cyril Ramaphosa praised the biodiversity economy as something embedded in South African identity and history at the Biodiversity Economy and Investment Indaba in March 2024. He listed wild-harvested staples like aloe ferox, sceletium, marula, pelargonium, and Buchu as bio-resources harvested for millenia by local communities.
Turning to the present, Ramaphosa said traditional industries based around such species must now shift to sustainable mass cultivation. By cultivating high volumes, traditional industries could participate in international markets, serving industries like pharmaceuticals and cosmetics through global trade networks and supporting national economic development.
Ramaphosa also emphasised that South Africa’s bioeconomy must graduate from harvesting to processing in order that the country can develop – something that relies on the spread of more advanced biomass processing plants.
Startups supporting South Africa’s value-added dream
Some startups are advancing this decade-long drive for a higher-value biobased economy in South Africa.
De Novo Dairy is a South African alternative milk protein startup gaining international attention. Its product is a precision fermentation method that tweaks yeast strains to make cow milk with all its chemical hallmarks, with the need for any living cows. Its focus right now is on producing nutritional infant milk.
Sawubona Mycelium is another pioneer of South Africa’, higher-value, science-led bioeconomy. It is in the business of producing various biobased ingredients and chemicals from mycelium – the underground structures of a fungi. The startup makes full use of mycelium’s chemical plasticity, turning it into cosmetic, pharmaceutical, and food inputs.
Mining contributed 6.2% to South Africa’s GDP in 2023 and one its most successful industrial biotechnologies comes from the sector. Mintek, its largest mineral processing company, has exported its bioleaching technology around the world. The technique uses bacteria to extract metals from ore.
In the realm of biotech, Pannar Seed is a native company that holds a large local market share for commercial GM seeds.
South Africa’s bioeconomy today
However, South Africa’s up-and-coming higher value biobased startups remain exceptions in the country’s wider bio-based landscape, dominated by lower-value processing plants.
So far, anaerobic digestion and waste treatment have been the areas that have received most government backing. Both are relatively low capital and low complexity activities.
South Africa began anaerobic digestion in the 1990s. Anaerobic digestion is where bacteria degrade organic matter without oxygen, producing biogas and a nutrient-rich byproduct called digestate that can be used as a soil conditioner.
By 2018, there were over 700 biodigester installations in South Africa. Although biogas and compost may provide less value than other biobased products, they are nonetheless economically vital to South Africa since they tackle problems specific to the national economy.
Anaerobic digestates are technologies that are appropriate for an economy with a large agricultural sector. The majority are attached to farms, where they process waste from abattoirs, livestock and harvesting, performing an essential environmental-waste clean up service whose products provide additional income for farmers.
Anaerobic digesters and biobased waste treatment have received government support because they act as low-capital intensity solutions to a major national issue: toxic waste landfills that are rapidly running out of space. Low-tech bio based industries also require more labour, a key consideration in a country struggling with long-term unemployment.
The fact that the biobased industries to have scaled most in South Africa are on the lower end of the value chain points to something wealthier bio economies should take note of.
These lower-value industries create jobs and value in a country with relatively levels of educational achievement, showing how biobased capacity is more likely to scale if the products and jobs it provides are fine-tuned to local needs.
Untapped agro-wastes
In-between the highest rungs of the biobased value spectrum and the lower end represented by biogas and compost, there is a middle ground that South Africa could embark on developing next: industrial chemicals from agro-waste.
Brenn-o-kem, a company established in 1968, is a national leader here. Located in the Western Cape, it uses grape skin and seeds from the wine industry to produce calcium tartrate, wine spirits, and grape seed oil and tannin.
South Africa also produces around 7 million tonnes of sugarcane bagasse, which can be similarly utilised as feedstock for making bioethanol, lactic acid (an input for cosmetics as well as production of bioplastic polylactic acid), sorbotal, glucaric acid, furfural, levulinic acid.
Forestry is another agro-industry that could yield feedstock for new industries with one review finding 129 potential processing pathways for 78 unique products using wood residues and wastes from forestry and the pulp and paper industry.
Invasive plants are a huge source of potential sustainable biomass in South Africa at around 215 million estimated over-dry tonnes. Harvesting invasive plants almost always brings ecological benefits compared to crops grown especially for industry. Invasive plant biomass does not require additional land, fertiliser, or water and while removing them usually brings a net ecological benefit to the species which have declined after its introduction.
Still, agro-waste chemicals come up against the ongoing problem of investment.
What’s needed are biorefinery technologies that can convert biomass into more than two intermediate or finished products. This capacity to produce several biobased products at the same plant is important because it spreads risks across diverse markets.
Multi-product biorefineries demand high investment and longer startup times than digestate plants. South Africa lacks the capital to achieve this – the fundamental reason why their bioeconomy remains undiversified. To tackle this, small scale biorefineries serving limited rural communities or farms are more feasible to begin with as it would be easier to attract investors.
Moving forwards
In some respects, the obstacles faced by South Africa’s bioeconomy may not be so far distant from those in Europe or the US. South Africa may have a lower density of higher-tech bio based industries but these economies all share the same challenge of scaling, wherever their industries fall on the value chain.
South Africa’s biobased prospects will depend on its government addressing structural factors holding back its economy more broadly. Lack of reliable power is one of the biggest factors deterring investment and economic growth there, with blackouts now a major political issue in the country.
The power grid issue is a symptom of a more fundamental problem: a hollowed out state that has proved incapable of directing resources to strategic sectors.
This points to a key lesson for countries everywhere as they attempt to make the biobased transition. State-led investments into electricity, rail, telecoms, security, and water are non-negotiable for a thriving bioeconomy. South Africa’s weak institutions has led to failing civil infrastructure, something now constraining its economic growth across sectors, including its biobased ones.
Along with domestic reforms, South Africa’s biobased growth will also depend on external assistance. In the EU, knowledge-exchange projects across national borders have been a fundamental part of trying to scale biobased industries. Knowledge and technology transfers from developed bioecoomies will be needed if South Africa is to progress its bid for sustainable development, with biobased economies as part of this.
This could be achieved by more closely linking together climate mitigation targets and policies with the development of biobased industries. For example, South Africa’s hopes for a higher-value bioeconomy are bound up in the aim of sustainable development, a link best encapsulated by its encouragement of genetic biotech for climate-resilient crops.
