Challenges in the Adoption of Circular Economy Practices among Small and Medium Enterprises (SMEs) in Awka, Anambra State, Nigeria

The global shift toward sustainable development emphasizes an all-sector transition from a linear economy to a circular economy, inclusive of small and medium-sized enterprises (SMEs). This study investigates the challenges faced by Small and Medium Enterprises (SMEs) in adopting Circular Economy (CE) initiatives in Awka, Anambra State. Using a survey of 100 SME owners and managers across hospitality, retail, manufacturing, and service sectors, the research explores challenges and motivating factors of CE adoption by SMEs through purposive sampling. Data was analysed using percentages, means, and ranking. Challenges identified include lack of awareness and information (21%), followed by lack of technical knowledge (20%) and financial constraints (19%). Ranking the severity of the challenges showed that lack of government incentive, lack of awareness, and financial constraints ranked first, second, and third, respectively. The two most significant motivating factors encouraging adoption of CE stem from the benefits derived, which are the reduction of operation cost (26%) and environmental sustainability (25%). The study concludes that CE adoption in Awka is at an early stage, driven mainly by environmental concerns and cost-saving motives. It recommends targeted training, financial incentives, and supportive policies to strengthen SMEs’ capacity for sustainable practices, thereby promoting environmental protection and economic resilience in the region.