What’s next for South Africa’s bioeconomy?

South Africa has enormous bioeconomy potential if we look solely at its natural resources. As one of the most biologically diverse countries in the world, it is full of genetic resources for biotechnology. The country’s agricultural sector produces about 12% of its GDP and offers a large, ready supply of potential raw materials.

However, South Africa has difficulty encouraging higher value bio-based industries. This is not for lack of political ambition and is part of the country’s broader difficulties in overcoming its middle-income status.

What progress has South Africa made in building bioeconomy capacity, eleven years after the publication of its National Bioeconomy Strategy? What lessons can be learned from South Africa’s challenges for other economies?

Higher value ambitions

South Africa, governed by the African National Congress (ANC) party since 1994, has long had ambitions to create a higher value bioeconomy. This was most clearly expressed in the 2013 Bioeconomy Strategy Paper, which signaled the ANC’s commitment to the sector.

The knowledge-based bioeconomy refers to bio-industries that are based on scientific research and allow the production of complex, highly processed goods from biological materials. These types of products typically command higher market prices than the primary agricultural commodities and lower-value biomaterials that currently form the backbone of South Africa’s bioeconomy.

Moreover, the plan was not dependent on what products they wanted to increase. His ambitions were broad, ranging from more mature bio-industries such as plant-based biofuels to less commercialized sectors such as industrial biotechnology. There was also bioprospecting, especially in the case of pharmaceutical products – something that allows us to take advantage of the exceptional level of biodiversity in the country.

An economy built on biodiversity

Another National Bioeconomy Plan outlines how the country should generate income from its biodiversity and natural ecosystems, in particular: The National Biodiversity Economic Strategy (NBES) 2016, updated in 2024.

The plan aims to commodify unique biological resources while also protecting them, ensuring that the resulting revenues return to the people of South Africa and not to foreign multinational corporations.

President Cyril Ramaphosa praised the biodiversity economy as embedded in South Africa’s identity and history at the Biodiversity Economy and Investment Indaba in March 2024. He cited wild-harvested staples as aloe ferox, sceletium, marula, geranium and Buchu. for thousands of years by local communities.

Returning to the present, Ramaphosa said traditional industries based on such species must now shift to sustainable mass farming. By growing large volumes, traditional industries could participate in international markets, serving industries such as pharmaceuticals and cosmetics through global trade networks and supporting national economic development.

Ramaphosa also stressed that for the country to thrive, South Africa’s bioeconomy must shift from harvesting to processing, which relies on the spread of more advanced biomass processing plants.

Startups supporting South Africa’s value-added dream

Some start-ups are continuing the decade-long push to create a higher-value bioeconomy in South Africa.

De Novo Dairy is a South African alternative dairy protein startup that is gaining international attention. Her product is a precise fermentation method that modifies yeast strains to obtain cow’s milk with all its chemical characteristics needed by all living cows. Currently, the focus is on the production of nutritious milk for babies.

Sawubona Mycelium is another pioneer of the science-based higher value bioeconomy in South Africa. It produces various bio-ingredients and chemicals from mycelium – the underground structures of mushrooms. The startup takes full advantage of the chemical plasticity of mycelium, transforming it into cosmetic, pharmaceutical and food raw materials.

Mining accounted for 6.2% of South Africa’s GDP in 2023, and some of the most successful industrial biotechnologies come from this sector. Mintek, the largest mineral processing company, has exported its bioleaching technology around the world. This technique uses bacteria to extract metals from ore.

In the field of biotechnology, Pannar Seed is a domestic company with a large share in the local market of commercial GMO seeds.

South Africa’s bioeconomy today

However, South Africa’s emerging biotech startups remain outliers in the country’s broader landscape, which is dominated by lower-value processing plants.

By far, anaerobic digestion and waste treatment are the areas that have received the most government support. Both types of activities are characterized by relatively low capital and low complexity.

In South Africa, anaerobic digestion began in the 1990s. Anaerobic digestion involves bacteria breaking down organic matter without oxygen, producing biogas and a nutrient-rich by-product called digestate that can be used as a soil conditioner.

By 2018, there were over 700 biodigester plants in South Africa. Although biogas and compost may provide less value than other bio-based products, they are nevertheless economically important to South Africa because they solve problems specific to the national economy.

Anaerobic digesters are technologies suitable for an economy with a large agricultural sector. Most are associated with farms where they process waste from slaughterhouses, farm animals and harvests, providing the necessary service of cleaning the environment from waste, the products of which provide farmers with additional income.

Anaerobic digesters and biodegradable waste treatment have received government support because they are low-capital solutions to a major national problem: toxic waste landfills, which are quickly running out of space. Low-tech biotech industries also require more labor, a key factor in a country struggling with long-term unemployment.

The fact that South Africa’s most successful bio-industries are at the lower end of the value chain highlights something that richer bio-economies should pay attention to.

These lower-value industries create jobs and value in a country with relatively high levels of education, demonstrating how biobased potential is more likely to arise if the products and jobs they offer are tailored to local needs.

Unused agricultural waste

Between the high end of the bio-based value spectrum and the lower end represented by biogas and compost, there is a middle ground that South Africa could engage in developing in the future: industrial chemicals from agricultural waste.

Brenn-o-kem, a company founded in 1968, is the national leader here. It is located in the Western Cape and uses grape skins and seeds from the wine industry to produce calcium tartrate, wine spirits and grape seed oil and tannins.

South Africa also produces approximately 7 million tonnes of sugar cane bagasse, which can be similarly used as a raw material for the production of bioethanol, lactic acid (input for cosmetics and the production of bioplastic polylactic acid), sorbotal, glucaric acid, furfural, levulinic acid.

Forestry is another agricultural industry that can provide raw materials for new industries. One review found 129 potential processing pathways for 78 unique products using wood residues and waste from forestry and the pulp and paper industry.

Invasive plants are a huge source of potential sustainable biomass in South Africa, with an estimated 215 million tonnes of excessively dry biomass. Harvesting invasive plants almost always has ecological benefits compared to crops grown specifically for industry. Invasive plant biomass does not require additional land, fertilizer or water, and its removal usually provides a net ecological benefit to species that declined in numbers after its introduction.

However, chemicals used in agriculture are still a problem for investment.

Biorefinery technologies are needed that can convert biomass into more than two intermediate or finished products. The ability to produce several bio-based products in the same facility is important because it spreads risk across different markets.

Multi-product biorefineries require large investments and longer start-up times than fermentation plants. South Africa lacks the capital to achieve this – a fundamental reason why its bioeconomy remains undiversified. To address this problem, small-scale biorefineries serving limited rural communities or farms are more feasible to start with, as it would be easier to attract investors.

Moving forward

In some respects, the obstacles facing South Africa’s bioeconomy may not be so far removed from those in Europe or the US. South Africa may have a lower density of high-tech, biobased industries, but all of these economies face the same scaling challenge, regardless of where their industries fall in the value chain.

South Africa’s prospects for biotechnology will depend on whether the government addresses the structural factors holding back the broader economy. The lack of reliable electricity is one of the biggest factors inhibiting investment and economic development in this country, and power outages are currently a major political issue in the country.

The energy grid issue is a symptom of a more fundamental problem: a hollowed-out state that has proven unable to direct resources to strategic sectors.

This points to a key lesson for countries around the world that are trying to achieve a biology-based transformation. State-led investment in electricity, rail, telecommunications, security and water is non-negotiable for a thriving bioeconomy. South Africa’s weak institutions have led to the failure of civil infrastructure, which now limits economic growth in all sectors, including bio-based sectors.

In addition to domestic reforms, economic growth in South Africa will also depend on external aid. In the EU, knowledge exchange projects across national borders are an essential part of attempts to scale up bio-based industries. The transfer of knowledge and technology from developed bioeconomies will be necessary if South Africa is to realize its sustainable development efforts, of which bio-based economies will be a part.

This can be achieved by closer linking climate change mitigation goals and policies with the development of bio-based industries. For example, South Africa’s hopes for a higher value bioeconomy are linked to the goal of sustainable development, a link best captured by encouraging the use of genetic biotechnology to produce climate-resilient crops.