Keypoints:
- Oil wealth can fund clean energy access
- Africa needs a just, localised transition
- Ending energy poverty must come first
FOR nearly 600 million Africans, the lights have yet to come on. Entire communities still cook with firewood, hospitals operate with unreliable power, and children study by candlelight. In 2025, that reality is unacceptable. Yet as the world races to decarbonise, Africa faces a stark dilemma: should it follow calls to abruptly end fossil fuel production, or use its oil and gas revenues to fund the journey out of energy poverty and towards a sustainable future?
Many would argue for the latter. In Africa’s case, oil and gas revenues are not an obstacle to climate action – they are a bridge to clean power and dignity for millions.
Energy poverty can’t wait for net-zero
Access to electricity is a basic human right, yet 43 percent of sub-Saharan Africa’s population still lacks it. The absence of energy holds back every facet of development – from healthcare delivery and education to industrialisation and job creation. According to the International Energy Agency (IEA), Africa needs between $25bn and $30bn annually to achieve universal electricity access by 2030. At present, investment falls far short of this mark.
Meanwhile, Africa contributes less than 4 percent of global emissions, yet is under intense pressure to rapidly phase out fossil fuels. Wealthy nations that built their economies on hydrocarbons now expect Africa to transition at the same speed – even if it risks leaving hundreds of millions in darkness.
This approach is not only unjust but unrealistic. The continent’s starting point is vastly different. Africa’s priority is not choosing between oil and renewables – it is powering its people now while building a future rooted in clean, reliable energy.
Using oil revenues as a lever for change
Africa holds vast oil and gas reserves that generate billions of dollars in annual revenue. Instead of rushing to leave these resources untapped, they should be harnessed responsibly to accelerate the energy transition. The African Energy Chamber (AEC) Africa-Paris Declaration makes this case clearly: fossil fuels can be a financial lever to build electrification projects, fund clean energy, and invest in infrastructure that lays the groundwork for long-term sustainability.
There are three key pathways where this approach can be transformative:
- Financing rural electrification
Decentralised energy solutions like off-grid solar and mini-grids are life-changing for remote communities where grid connections remain decades away. Fossil fuel revenues can bankroll these systems at scale. Imagine a mother no longer cooking with firewood or a student finally studying under proper light – these small changes translate into massive social and economic progress.
Without interim funding from oil and gas, such initiatives remain underpowered. Redirecting even 10 percent of oil revenues from producing nations could cover significant portions of Africa’s rural electrification funding gap.
- Building Africa-led energy financing institutions
Closing the continent’s energy investment gap – estimated between $31bn and $50bn per year – requires homegrown solutions. The newly launched Africa Energy Bank, backed by oil-producing states and private investors, is designed to bridge this shortfall. Its mandate is to mobilise capital for energy projects, from large-scale solar parks to natural gas plants that can serve as transitional power sources.
Global investors are already showing interest. Development finance institutions like the African Development Bank, the World Bank, and the IFC are helping de-risk investments with concessional loans and guarantees. Oil revenues can amplify this momentum, making energy projects bankable and fast-tracking access.
- Creating enabling policies for investment
No financing mechanism works without stable policy environments. Governments must commit to revenue-generating projects, transparent regulation, and incentives that unlock private capital. A just transition demands strategic planning – using fossil fuel revenues not to expand dependency, but to fund the shift to renewables, grid upgrades, and industrial electrification.
When managed responsibly, oil wealth can underpin the infrastructure needed to scale up solar, wind, and hydropower. It can support industries that create jobs, strengthen healthcare and education systems, and foster innovation. This is not a fossil-fuel-first approach; it is a development-first pathway that recognises the reality Africa faces today.
Avoiding a one-size-fits-all climate agenda
Africa’s road to net-zero is not a rejection of climate action – it is a demand for fairness. A ‘one-size-fits-all’ global agenda ignores history and context. Industrialised nations reached prosperity using fossil fuels for over a century; Africa is being asked to leapfrog to renewables without the same level of investment, technology transfer, or financing support.
We cannot accept a future where international climate policy locks in inequality. Ending energy poverty must be the foundation of Africa’s climate action plan. That means embracing all viable resources – fossil and renewable – and using revenues from one to build the other. As the Africa-Paris Declaration notes, ‘a fair transition recognises that fossil fuels remain valuable for Africa’s development, prosperity, and energy access goals.’
The bridge to a brighter, greener future
The path ahead is not easy. Managing oil and gas revenues transparently and directing them to energy access projects will require political will, strong governance, and collaboration between governments, private investors, and civil society. It will also invite criticism from those who argue that any investment in fossil fuels is incompatible with climate goals.
But the alternative – leaving millions without power in the name of emissions targets they barely contribute to – is morally indefensible.
Africa’s energy transition can and must be just, inclusive, and tailored to the continent’s realities. Oil and gas revenues, when invested wisely, can be the bridge that finally ends energy poverty and lights up a sustainable future for all Africans.
NJ Ayuk is the Executive Chairman of the African Energy Chamber and a leading advocate for African energy development. He is the author of several books on energy and economic growth in Africa
