Compliance Markets

Regulatory drivers for biodiversity compensation are still in development across much of Africa. A number of countries – Egypt, Morocco, Uganda, South Africa, Rwanda, and Madagascar – have Environmental Impact Assessment (EIA) regulations, sectoral guidelines, or other policies in place providing a legal framework for compensation, though the mitigation hierarchy is typically not fully implemented or clearly defined.

South Africa

South Africa is at the forefront of biodiversity offsetting in Africa. Its history stems from the EIA regulations promulgated by the National Environmental Management Act 107 of 1998 (NEMA). The national environmental principles contained in Section 2 of this Act specify that significant negative impacts on biodiversity must be avoided and, if they cannot altogether be avoided, must be minimized and remedied. There is currently no explicit legal definition of what “remedy” means in the context of the Act. However, in practice it is interpreted as the need to compensate for any residual negative impacts on biodiversity after efforts to minimize these impacts have been taken into account, through the use of offsets.

In 2013, a National Framework for Biodiversity Offsets was released by the Department of Environmental Affairs and the South African National Biodiversity Institute (SANBI), providing legal context and national definitions for offsetting. It requires offsets to be considered as part of the mitigation hierarchy in EIAs under NEMA and under other major planning and land use regulations. SANBI and the Department of Water Affairs (DWA) in 2014 released the National Wetland Offset Guidelines, aimed primarily at the mining sector and endorsed by DWA as the national standard for developing wetland offsets.

Biodiversity offset policies and draft guidelines also exist at the provincial level in Kwa-Zulu, the Western Cape, and Gauteng.


In Egypt, sectoral guidelines for major projects include compensation requirements for damages, which are directed to a national Environmental Protection Fund.


Africa is home to a number of voluntary biodiversity offset pilots, with demand typically driven by multinational corporations in the extractive industries. Offset pilots are active or have been proposed in Cameroon, Chad, Egypt, Ghana, Guinea, Madagascar, Namibia, and Uganda (see country details below).


Uganda is in the early stages of developing biodiversity offsets. The country’s Environmental Impact Assessment (EIA) law provides a supporting framework for compensation schemes, and a few pilot projects are in the works, mainly driven by oil companies. The government has proposed a national-level Conservation Trust Fund to channel offset payments from oil companies and other industries.


Madagascar, with high levels of endemism and biodiversity, has a long history of efforts to conserve its unique biomes. EIA regulations play an important role in Madagascar, providing guidelines for major projects and requiring the hierarchy of avoidance, minimization, and restoration, although there is no law requiring offsets for residual impacts to biodiversity.

Although there is no national offset program, some voluntary projects have taken place, laying the groundwork for a future program. Two mining companies, Ambatovy and Rio Tinto, are currently creating biodiversity offsets for their projects on a voluntary basis in Madagascar.