Category: Energy

Time for Africa to get Energy independence.

“Every day without reliable power translates into lost production, interrupted services, constrained investment, and reduced opportunity.” President Ramaphosa speaking at the energy indaba in March 2026,

 

Africa didn’t need another energy shock. But that’s exactly what the war in Iran has delivered. Not through missiles or troops, but through fuel prices, shipping delays, weakening currencies, and rising inflation.

Things were starting to look better for Africa. South Africa was showing signs of recovery. Nigeria and Ethiopia were pushing through reforms. Zambia and Ghana were emerging from debt restructuring, and Kenya had stabilised its macroeconomic position. On top of this, Africa was positioned to benefit from a new critical‑minerals boom. The IMF summed it up in the 2026 World Economic Outlook in January stating “Growth is expected to accelerate in sub-Saharan Africa… supported by macroeconomic stabilization and reform efforts in major economies.”

All of that has now been thrown into doubt by the crisis in Iran. The consistent thread across all of this is energy. Africa is a net petroleum importer with limited reserves. Any significant shock hits immediately.

This is the second significant energy shock in the last 5 years (the first being the Russian invasion of Ukraine). African policy makers, businesses, and households should by now have heard the message loud and clear, Africa needs energy independence. Without it the continent has little economic agency and is subject to the whims of decision making in Washington, Moscow, and Riyadh where we are not part of the conversation.

To create that independence, it will require a different approach, we don’t have the money for massive infrastructure investment thus, we must make it cheap and easy for businesses and households to build energy resilience.

Iran and its impact on Africa

No missiles have hit the continent but the war in Iran is a slow-motion disaster for Africa. Higher oil prices, disrupted shipping routes, and a strengthening dollar are feeding directly into inflation. That inflation is already squeezing households and businesses, and it will worsen if the conflict drags on.

Longer term the impacts on fertiliser availability and the inability for industry and businesses to import inputs and exporters to access crucial middle eastern markets and hubs will significantly undermine growth across the continent (Afriexim bank has a good primer here). Fuel prices are already increasing, this is coupled with weakening African currencies and a strengthening dollar, making fuel imports even more dear and amplifying the inflationary impac as all other dollar denominated imports (and debt payments) get more expensive.

The energy imperative

Energy is the lifeblood of modern livelihoods. Whether as electricity or fuel, it is the bedrock of agriculture, transport and logistics, mining. industry, services, and IT. It is a massive component of quality-of-life enabling people to get to work, access affordable food, do their homework in the evening. And Africa does not have enough of it with 600 million people without access to electricity accounting for 85% of the global population without access to electricity. On top of that Africa is dependent on imports for much of its energy needs, the continent imports about 75% of its refined fuel from the Middle East and India and that demand is set to grow.

Africa does not produce enough energy. Worse, it imports most of what it uses. That makes the continent a dependent customer on the global energy stage. Even worse we are last in line, behind Europe and Asia because we do not have their demand or purchasing power.

Two countries already show what energy independence can look like in practice: Nigeria and South Africa.

Shifting from dependence to independence

Africa needs energy, but we don’t have enough and are dependent on the rest of the world to get most of what we have. To get out of this conundrum we need to think differently and move fast. Luckily, we already have examples on the continent that point to plausible solutions.

Free the market – let people make their own energy.

Governments don’t need to solve this alone — and in many cases, they can’t. Most African energy systems are top-down government defined systems. The government decides import and fuel prices, the national electricity utility controls an ageing and inefficient grid. Making energy, expensive and inefficient which has knock on effects throughout the system. Africa does not have the money to make massive investments in oil and gas extraction, storage, refining, and pipelines that could decouple it from global supply and in any case that would take decades to complete. The solution is simple, allow households and industry to uncouple themselves from this system with a focus on renewables.

1.        Nigeria – from generator to solar

In Nigeria, the national grid is characterised by its failures to supply enough or reliable energy. As a result many households and businesses generate their own power, primarily through diesel generators, producing approximately 40,000MW of power. In recent years, this is shifting to solar, which is growing by 22% a year.

This transformation is driven by two things. First the high cost of diesel fuel and the cost of powering generators, solar is now 40% to 60% cheaper than running a diesel generator.  Second policy reforms namely The Electricity Act 2023, the Nigeria Electrification Project (NEP) and “Embedded Generation” rules have provided incentives, tax breaks and feed-in tariffs designed to de-risk investment and allows states like Lagos to issue their own generation and distribution licenses, bypassing the national grid bottleneck. (you can read a great report on this from the energy think tank Enzi iJayo here)  

2.        South Africa – load shedding to load bearing.

In South Africa, load shedding had become a daily reality undermining business and quality of life. Realising that it could not fix the national utility, Eskom, quickly enough to stabilise supply and bring on board new supply the government embarked on a series of reforms.

The Electricity Regulation Amendment Act (ERAA) of 2024. These allow the private sector to build big (100mw +) power plants for their own use without complex licensing requirements, and the ability to sell that power onto the national grid. This has reduced demand on Eskom by 3%. In addition between 2023 and 2026 household rooftop solar has expanded by 215%, on sunny days this reduces demand on Eskom by 15%-20%. This has been enabled by waiving registration fees (reducing the cost of installation), and by allowing users to sell their excess power onto the grid and reduce their bills.

Simple and at scale

The Nigerian and South African examples show that with the right policies and incentives domestic energy production can grow at pace and scale. Today they both have plans to expand this, Nigeria has announced two massive solar assembly plants by both the public and private sectors. This will significantly reduce the cost of new solar accelerating its adoption. In South Africa the wholesale electricity market reforms have triggered investments in grid level solar, wind, and battery storage projects.

The Ethiopian example of the Grand Renaissance Dam shows that you can fund massive energy infrastructure projects without having to borrow. And they have coupled this with policies like banning the import of fossil fuel vehicles in order to reduce dependence on imports.

Time to move.

Africa’s policy makers are not known for moving at speed, but hopefully this latest crisis forces them to do so as it impacts their citizens wallets, votes, and likelihood to protest and throw them out. Africa’s future lies in its ability to produce its own energy. Not only reducing dependence on others, but decoupling the stability of our currencies, inflation and economic health on events and markets far outside our control.

This is not an impossible dream as some may have you believe. All it requires is breaking the old way of thinking and putting in place policies that allow businesses and households to take the lead in finding solutions for their energy needs, And coupling that with incentives that make it cheap for those solutions to be solar and wind, which Africa has in abundance and for free. This will happen much faster than waiting for governments to build power stations and transmission lines.

The war in Iran will cause serious pain, lets make it the last time that happens and start building out Africa’s energy independence. Energy crises have toppled governments before. Leaders who ignore this risk are gambling with inflation, currency stability, and social unrest.

Charting Africa’s Energy Future

Africa’s Energy Future

 

The world is at a crossroads. The war in Ukraine has seen Russia force Western Europe into an energy crisis, and the wider world has been subjected to higher energy prices to keep the lights on and cars on the road.

In Africa, this pain is being felt as energy-driven inflation. Coupled with the rise of the dollar which is making everything paid for in dollars, such as oil gas and coal, wheat, maize, cooking oil and fertilizer even more expensive, doubling the pain. The focus of most policymakers is on the immediate cost of energy and its impact on the cost of living. However, the question we should be asking ourselves is, what is Africa’s energy future?

In a world where the impacts of climate change are causing a myriad of natural disasters, should we be investing in hydrocarbons? What technologies will provide the right mix for the continent, and how do we transition to that mix? Energy is not just electricity and petroleum, its cooking, heating, fertiliser production and the lifeblood of a modern digital economy.

How we chart our energy future will determine our socioeconomic future. Unlike the industrial revolution or the rise of the Asian tigers, we do not have the luxury of using oil, gas, and coal without concern for the consequences. Nevertheless, Africa does need an energy revolution as the foundation for a developmental one, and for that to happen, we must ask the tough questions about the continent’s energy future.

What must Africa’s energy future achieve?

As the continent thinks about its energy future there are a number of factors that must be considered as part of the equation for developing a viable long-term energy strategy.

  1. Access

Currently, about 43% of the continent, over six hundred million people do not have access to energy. Energy access is critical to improving standards of living, basic services (lights in schools, refrigeration and working machines in hospitals etc.) and as a foundation for growth (energy is critical for the development of any sort of industry). Thus, the first imperative is that Africans must have access to affordable and reliable energy.

  1. Sustainability

Africa is facing the brunt of the global climate crisis and we cannot be responsible for pouring fuel on an already raging fire. Africa should not and must not try to power the development of the continent by burning hydrocarbons. We must find and use alternatives. Many see this as unfair, as the developed world blocking the path that they used to industrialise while making Africa pay the price for their past sins. While morally, there may be validity to this argument, it does us no good to make it, as we would bear the brunt of its consequences both now and in future generations. As I have written before rather than treat climate change as a disaster that happens to us, we must also see it as an opportunity as I have written about previously. Seize the opportunity to leapfrog the hydrocarbon phase and make Africa a Green economic hub. An opportunity to develop new crops for Africa whose IP is owned by Africa that does not need as much energy-intensive fertiliser. An opportunity to stop begging for aid but instead use our oil, gas, and coal reserves to instead make money to fund our energy revolution off of carbon credits.

  1. Africa first

Africa’s energy future cannot be another victim of decisions made in foreign capitals. By this, I mean that we cannot allow Africa to be the casualty of the developed world’s net zero strategies, which will affect the continent in a number of ways.

First and foremost, what is the long-term viability of Africa’s, oil, gas and coal deposits, which an energy-starved west is pushing us to develop? Yet, in the long term, they will choose their own net-zero path and leave the continent with stranded assets. Should we consider the option of selling these assets as carbon credits or offsets instead rather than taking the financial and environmental risks of developing them (you can read more about this idea here).

Second, it is likely that development financing and aid will have new “climate” conditionalities attached as extensions of national climate goals further reinforcing Africa’s need to rely on taxes, not aid and decouple ourselves from the policy whims of Brussels or Washington.

  1. Security

Africa must be in control of its energy future, the fuel, resources, and technology that is used to produce that energy must be in Africa. As the current crisis in Europe shows, without control of your own energy, your destiny is decided by international energy markets. Thus, if Africa decides to pursue green hydrogen, it must be produced on the continent, and we must have an ownership stake in the plants and technology doing so. Energy security ensures accessibility.

Charting a path to the future

Charting Africa’s energy future will require crafting an energy policy that combines the four elements of accessibility, sustainability, security, and primacy. How they are combined and balanced will look different in each African country (and therefore I have not advocated any specific energy solutions in this post). However, there are things we can do as a continent (or regions of the continent), which can have a positive impact such as developing inter-connected grids. Sharing knowledge, expertise, and investment (how can Kenya’s expertise in geothermal energy be applied on the continent). Most importantly, what African financing solutions can we develop to fund an energy transformation on the continent?

Energy is the lifeblood of any economy and the foundation of socio-economic transformation. If Africa is to develop and build a better future energy will be a key part of that story. We must be deliberate and forward-thinking in how we build our energy infrastructure to ensure that better future. We cannot take it for granted or wait for someone else to produce the solution or the funding. Through smart, deliberate policy we can take charge of our continent’s energy future and take control of the future of our economies and societies.