Barriers to Circular Economy Adoption by Manufacturing Industries: Empirical Evidence from Tanzania

This study examined the level of circular economy (CE) practices, and barriers influencing their adoption among manufacturing industries in Tanzania. Using a mixed-methods approach, data were collected from manufacturing firms (n = 101) using a structured questionnaire and analysed using descriptive statistics and Structural Equation Modelling (SEM), complemented by a qualitative content analysis. The findings revealed generally low levels of CE implementation, primarily characterised by the transition from non-renewable to renewable energy sources as well as the recycling of plastics and metal wastes into value added products. CFA and SEM were employed to evaluate the measurement and structural models. The model demonstrated good fit, with indices (CMIN/DF = 1.545, CFI = 0.960, TLI = 0.952, SRMR = 0.040, RMSE = 0.073) falling within acceptable thresholds. All factor loadings were statistically significant (p < 0.001) and exceeded 0.50, confirming the validity of the measurement model. Reliability and convergent validity were also established, with Cronbach’s alpha, composite reliability, and average variance extracted values surpassing 0.50. The SEM results indicated that cultural, regulatory, and financial barriers do not have a statistically significant influence on CE adoption (p > 0.05), suggesting that these factors are not primary constraints in this context. In contrast, technological barriers were found to have a significant effect (p < 0.05), highlighting the critical role of technological capacity in facilitating CE implementation. These findings imply that efforts to accelerate CE adoption in Tanzania and similar Sub-Saharan African contexts should prioritise technological innovation, infrastructure development, and supportive financial mechanisms rather than focusing primarily on cultural or regulatory change. The study provides important policy implications, recommending the development of targeted guidelines, incentives, and enforcement mechanisms to promote resource efficiency, waste minimisation, and cleaner production. While limited by a relatively small sample size, the study offers valuable evidence for policy formulation and industrial planning, and suggests the need for future research with larger samples to further validate and extend the findings.