Want to understand the nature and potential of the charcoal business in Africa? This is one of the most detailed articles you’ll ever find on this subject.

As global crude oil prices continue to rise, kerosene and cooking gas have become expensive and unaffordable for many ordinary people in developing countries. For millions of Africans who need heat energy (or fire) to cook their daily food, wood remains the easiest and cheapest source of fuel.

According to the United Nations Environment Program (UNEP), firewood and charcoal alone provide more than 40 percent of energy used in Africa.

In fact, around 80 percent of households on our continent depend on wood and charcoal as a primary energy source.

Due to its desirable qualities, Africans use more than 23 million tonnes of charcoal every year, making it a multi-billion dollar industry.

This interesting article looks at the controversy that surrounds this business and the reasons for the huge and growing demand for charcoal across Africa.

Why is the demand for charcoal so huge in Africa?

A picture is worth a thousand words. We developed the interesting infographic below to paint for you a visual story of wood and charcoal in Africa.

Every day, millions of Africans have to decide on the most suitable means of providing heat for cooking. Wood and charcoal remain the most popular choice in Africa because they are locally available, easy to use and are by far the cheapest option when compared to electricity, kerosene and cooking gas.

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Stop or Go? The Good and bad sides of the charcoal business in Africa

As you may already know, there has been a lot of controversy concerning the charcoal business.

It is our duty on Smallstarter to bring your attention to the two sides of this controversy so you can make an informed decision about this business on a clear conscience.1.charcoal business in africa 3

The good side…

Without wood and charcoal, millions of Africans would be unable to afford the energy they need for cooking and heating.

Electricity supply is still very poor and unavailable to many parts of the continent. About 50 percent of Africa’s one billion people currently live below the poverty line and many of these people can afford electricity, kerosene or cooking gas to prepare the food they need to survive.

For Africans who use wood and charcoal to satisfy their energy needs, it’s a matter of survival, not choice.

If there was a much cheaper option than wood, people in this category would use it. For them, it’s all about affordability and availability. These people will continue to use wood until it vanishes from the earth or until they can afford better alternatives (like electricity, kerosene and cooking gas).

Because of this huge demand, charcoal has become a booming business opportunity in many urban and rural parts of Africa.

The bad side…

Charcoal is produced from wood; and wood comes from trees. According to the United Nations Environment Programme, up to 90 percent of wood harvested in Africa is used as firewood and charcoal for cooking.

Cutting down trees (deforestation) causes harm to the environment and promotes climate change. As a result of these undesirable effects, some African countries like Kenya, Tanzania and Gambia have imposed bans on charcoal production in order to preserve the trees and forests.

As Africa’s population continues to grow and more people migrate to cities and towns, the demand for energy is expected to rise. More trees will be cut down to produce the wood and charcoal to satisfy the bursting demand for energy.

The outcome may be ugly – our forests will become deserts and lots of tree and animal species may be lost forever.

However, this bad side of charcoal production doesn’t have to remain bad. Planting two or more trees for every one cut down will help to totally avoid the dangers that come with destroying our forests and make charcoal production sustainable.

5 Reasons why charcoal is in high demand in many parts of Africa

  • Charcoal (popularly known as ‘makala’ in Swahili) contains double the energy of ordinary firewood and burns much hotter. As a result, charcoal can cook food much faster than most other fuels like kerosene. In comparison to firewood, charcoal is a much cleaner and healthier fuel because it produces very little smoke (and harmful gases) when it burns.
  • Housewives love charcoal because charcoal fires are convenient and very easy to manage. Unlike a wood fire which requires regular attention to avoid burning out, a charcoal fire is gentle, very effective and needs no regular checkups. (photo credit: rockwoodcharcoals.com)
  • Charcoal is cheap, readily available and very affordable. Compared to other sources of energy – electricity, kerosene and cooking gas – charcoal is inexpensive for many Africans. Unlike these other fuels which often require vast distribution networks before they get to the final consumers, charcoal is largely produced and sold locally.
  • Because charcoal is much lighter in weight than firewood, it is cheaper and economical to transport over longer distances. Charcoal takes less room and can be stored for a very long period without damage or spoilage. Unlike firewood, it cannot be attacked by insects and fungi which reduce effectiveness and value.
  • Charcoal stoves and cooking appliances are also cheap and produced locally. Compared to electric, cooking gas and kerosene stoves which are often more expensive, charcoal stoves are simple, very effective and produced by local welders and craftsmen.

The short video you’re about to watch is about Toyola Energy, a small stove business in Ghana which has produced and sold over 150,000 charcoal stoves that are cooking meals for around 1 million low-income people in the country.

The company, which was started in 2006 by two entrepreneurs, Suraj Wahab and Ernest Kwasi Kyei, made an impressive turnover of $550,000 in 2011. It applies simple and readily available materials like scrap metal and clay to produce traditional charcoal stoves that use 30 percent less charcoal than ordinary stoves, thereby helping more Africans spend less on charcoal.

Toyola trains local craftsmen to produce these energy-efficient stoves and then sell them off to the market at about $7 per stove. These stoves are already spreading to other parts of the West African region like Benin, Togo and Sierra Leone.

In 2011, the company won the Ashden Awards for Sustainable Energy. It’s such an interesting story. Watch and learn…

How to make money from the charcoal business in Africa…

Now that we know why charcoal is one of the hottest selling commodities in Africa, it’s time to take a closer look at the different ways to make money from the high charcoal demand.

There are three main ways to enter and exploit the charcoal business. They are: charcoal production, charcoal sales and manufacturing charcoal stoves and appliances.

Let’s look at these options one at a time…

1. Charcoal production

Charcoal is usually produced by burning wood in the absence of air. This complex process, known as ‘carbonization’, often occurs between 450 to 600 °C.

Within this temperature, several vapours and gases are removed from the wood and all that remains is charcoal – the solid black substance that contains a lot of carbon and produces a lot of heat when burned.

In many parts of Africa, charcoal is produced through the kiln or earth mound method. This involves arranging logs of harvested wood and covering the pile with grass and earth before the wood is set on fire. This covering helps to ensure that air is kept out while the wood burns.

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The Casamance kiln above is an earth mound kiln equipped with a chimney that was developed in Senegal. This chimney, which can be made of oil drums, allows a better control of air flow and helps to produce high-grade charcoals.

Using the right type of wood often determines the quantity and quality of charcoal produced.

Although charcoal can be made from both hard and soft wood, the hardwood variety is preferred and fetches a higher price in the market because it does not break easily and has a higher energy content than charcoal made from soft wood.

Before you consider charcoal production, you must know that it is a very labour-intensive process. Labour is required to fell the trees in the forest, cut them into sizeable logs, arrange the logs in a kiln and harvest the charcoal once it is ready.

It is also important that you obey any local laws in your country that are against unauthorized felling of trees for the production of charcoal. Some areas will require you to register before you can produce charcoal while other areas do not allow charcoal production at all.

If you would like to learn more about the whole charcoal production process and the different methods and techniques that are used, we found just the right resources to help you. Here they are…

2. Charcoal sales

1.charcoal business in africa 6This segment of the charcoal business comprises traders who buy the charcoal produced by local people and sell them in the markets or by busy roadsides.

Depending on your location, a 15 to 20 kilogram bag of charcoal can sell for anything between 7 and 12 dollars in the open wholesale markets.

Retailers often package the charcoal in smaller sizes that allow consumers to buy according to their needs and how much they can afford. In many cities, about 20 US cents should buy just enough charcoal to prepare a full family meal. (photo credit: treehugger.com)

Other opportunities in this segment include packaging charcoal for special needs (such as barbeque) and for export. Because environmental laws are much stricter in many developed countries, some entrepreneurs in developing regions like Asia, South America and Africa are earning foreign exchange from exporting charcoal to Europe and the USA.

3. Charcoal stoves and appliances…

There is an interesting and growing market for energy-efficient stoves which burn less charcoal and produce more heat. These improved stoves save money for millions of Africans every year and provide more convenience.

Compared to traditional charcoal stoves which have been used in Africa for decades, improved stoves make charcoal to burn more efficiently with less smoke. Many of these stoves which are produced in several parts of Africa use materials like ceramics and clay to improve the heat production capacity of charcoal.

Like in other parts of Africa, many people in Sierra Leone use a wood-stove to prepare their meals. After discovering a more economical way to make charcoal stoves during a visit to Kenya, Mr. Njai developed the ‘Wonder Stove’ which has become a huge success in his native Sierra Leone and other parts of West Africa.

The 3-minute video you’re about to watch tells the remarkable story of Njai Wonder Stove.

What do you think about the charcoal business in Africa?

While the use of charcoal remains a controversial issue and continues to spark strong interest and debate, research shows that as Asia and Latin American countries industrialized — particularly China and Brazil — people have switched from firewood and charcoal to fossil fuels (cooking gas and kerosene).

Until such a time comes, charcoal consumption in Africa is expected to grow due to the critical role it plays in meeting basic energy needs.

We believe that the opportunities identified in this article can be taken further by your creativity and energy. If you are confident a charcoal business will work for you, it’s important that you start taking action as soon as possible.

You could also choose from many more amazing business ideas in the Business ideas section of this website.

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To your success!