Africa’s Energy Paradox: Unlocking Vast Resources To Overcome Deep Power Poverty – Report

Africa is a continent blessed with extraordinary natural wealth, yet it faces one of the world’s most severe energy challenges. Around 600 million people across the region still live without access to electricity, and nearly four-fifths of the population depend on traditional fuels such as wood and biomass for cooking. This creates heavy indoor air pollution that leads to serious health problems and causes many premature deaths every year. The situation is a difficult paradox: although Africa has remarkable energy resources, millions continue to live in energy poverty.

The continent has some of the most promising renewable energy potential on Earth. Many African regions record the world’s highest levels of solar irradiation, offering enormous potential for solar power. Coastal and highland regions enjoy strong and steady wind conditions, and there is still significant hydropower capability that remains undeveloped. According to Wood Mackenzie, total solar and wind capacity in Africa is expected to increase by almost 600% over the next decade, although it will still be growing from a very low base. Africa also plays a vital role in supplying minerals that support the global clean energy transition. It leads the world in producing cobalt, platinum, and manganese, and is expanding its extraction of lithium, copper, and rare earth elements—all essential components for electric vehicles, batteries, and renewable energy technologies. These resources place Africa at the heart of global electrification.

However, Africa’s clean energy development has struggled to keep pace with its potential. Solar installation rates actually declined year-on-year in 2024, and the continent accounts for less than 2% of global solar capacity, despite having an estimated 40% of the world’s best solar exposure. The continent’s energy development is slowed by weak regulatory environments, limited infrastructure, and financial constraints. Many public utilities face insolvency, limiting their ability to purchase power or guarantee long-term contracts. Investors often hesitate due to the lack of bankable customers and policy uncertainty.

To accelerate progress, African countries need more flexible and innovative power solutions. Decentralized and off-grid systems could rapidly expand electricity access, especially in remote rural regions. Solar-and-storage mini-grids and mobile containerized power units are showing positive results. In Nigeria, such systems are bringing reliable electricity to rural households and small businesses at speed, demonstrating the ability of smaller-scale projects to transform communities faster than large centralised power infrastructure.

Investment is another major barrier. Africa receives just over 2% of global energy investment, far below what is required for universal electrification. While major economies have promised climate finance, competing priorities have slowed delivery. One possible route is encouraging China, a major importer of Africa’s critical minerals, to connect mineral supply agreements with increased financing for renewable energy projects. Development banks and financial institutions also need to expand concessional and blended financing to make renewable projects commercially viable.

Alongside clean energy growth, Africa must also maximise its oil and gas resources. The continent holds an estimated 214 billion barrels of oil equivalent in reserves, but only about one-third has been commercialised so far—one of the lowest rates globally. Investment challenges include regulatory uncertainty, governance issues, limited gas market infrastructure, and financing hurdles. International pressure regarding emissions also restricts development, even though Africa contributes only about 3.5% of total global emissions.

African nations are pushing ahead with plans to develop hydrocarbons. Nigeria aims to double oil and gas production by 2030, and Angola has exited OPEC to expand its output. Africa already supplies nearly 10% of global LNG. Major projects such as the TotalEnergies-led Mozambique LNG development are expected to turn East Africa into a major export hub. Oil and gas revenues could bring an average of US$109 billion annually to African governments through 2030, and gains could be greater if more reserves move to commercial production.

Natural gas in particular is viewed as a critical transition resource. Africa has the world’s lowest gas consumption per capita, but shifting to gas could reduce emissions and replace more expensive and polluting diesel and fuel oil. Many governments are reforming regulations and creating gas development plans, like Nigeria’s Decade of Gas initiative. Cleaner upstream production methods, including post-combustion carbon capture and electrification, are being integrated into new projects. Africa’s upstream operations account for less than 9% of global upstream emissions.

As Africa moves toward a future where its population is expected to reach 2.5 billion people by 2050, the need for rapid energy development is urgent. A balanced approach is essential—one that advances clean energy, utilises mineral wealth, and expands hydrocarbon production to finance growth. With coordinated global support and strategic resource use, Africa can transform energy poverty into energy prosperity and unlock the full potential of its young, dynamic population.