Digital Transformation and Informal Innovation in Africa: Reframing STI Policy for Inclusive Circular Economy Transitions

Amid increasing environmental and economic pressures, Africa’s transition to a circular economy (CE) presents a vital pathway to inclusive, low-carbon development. Yet, how digital transformation, informal innovation, and science, technology, and innovation (STI) policy readiness shape CE outcomes remains underexplored. This study examines these dynamics across 45 African countries from 2000 to 2024, using Generalized Estimating Equations, Panel-Corrected Standard Errors, Instrumental Variables Two-Stage Least Squares, and Quantile Regression. Findings show that mobile technologies consistently enhance CE performance, while internet use and secure digital infrastructure have limited or negative effects without reliable electricity, digital skills, and institutional inclusion. Informal innovation—proxied by self-employment—emerges as a key driver of circularity, whereas ICT goods imports can hinder progress where absorptive capacity is weak. Formal scientific knowledge (STJA) exerts strong positive effects. STI policy tools show mixed results: capital formation supports CE, while regulatory quality and government effectiveness are negative unless paired with strong infrastructure and employment readiness. Regional analysis reveals that Central Africa benefits from strong synergies between informal innovation, mobile access, and regulatory quality; East Africa shows gains from self-employment and capital formation but is constrained by weak regulation and ICT dependence; West Africa combines progress in mobile and scientific outputs with weak governance; and Southern Africa shows mostly negative effects across all pillars. These findings underscore the need for locally embedded, inclusive STI strategies to accelerate Africa’s green transition under African Union Agenda 2063.