Africa’s Energy Security Crisis: Beyond the Geopolitics of Oil and Gas

The Iran war has highlighted a stark reality for many African countries: their energy security is increasingly hostage to events beyond their borders. Fuel price shocks, triggered by global market fluctuations, have exposed the continent’s deep dependence on imported fossil fuels. This crisis affects not only national electricity markets but also regional ones, impacting utilities, governments, businesses, and households.

African countries like Nigeria and Ghana rely heavily on gas-fired generation and imported fuels. When global fuel prices rise, so do electricity costs, putting pressure on struggling utilities that fail to recover the full cost of supplying power. The West African Power Pool further amplifies this effect, as Nigeria and Ghana export power to neighboring countries.

At first glance, oil-producing nations like Nigeria and Mozambique might seem insulated from the crisis. However, their upstream production is dominated by international oil companies, leaving governments with meager returns on equity stakes. Governments receive royalties and taxes but a significant portion of extraordinary profits generated during price spikes flows to private operators and their shareholders.

The paradox is stark: resource wealth alone does not guarantee energy security. Without stronger fiscal policies, better utility governance, or mechanisms to capture more gains from commodity booms, global price spikes strengthen company balance sheets far more than they strengthen national electricity systems. Higher export revenues may improve government accounts but do little to address the structural problems that continue to make electricity unreliable and unaffordable for millions.

Even countries leading the clean energy revolution are not immune to this crisis. Morocco and Kenya have made significant strides in renewable energy development, yet remain exposed when global oil and gas prices spike. Their experience serves as a reminder that diversifying electricity generation makes power systems more resilient but does not eliminate vulnerability when transportation, industry, backup generation, and public finances remain closely tied to imported fossil fuels.

The goal of building more renewable projects is necessary but insufficient; it must be accompanied by efforts to reduce dependence on energy systems whose costs are ultimately determined elsewhere. This requires a fundamental shift in how African countries approach energy policy, prioritizing the development of regional value chains, promoting domestic industries, and investing in infrastructure that can mitigate external price shocks.

The conflict also threatens Africa’s energy future by driving away investment. Between 2010 and 2024, the UAE and Saudi Arabia announced over $175 billion in African energy investments. However, geopolitical instability changes investment decisions, redirecting resources toward defense spending and domestic priorities. Investors become more cautious about emerging markets generally, making it harder for African utilities to secure affordable capital.

The Iran war has exposed a broader lesson: resource wealth alone is not enough to guarantee energy security. African countries must adopt a more nuanced approach, one that balances the need for foreign investment with the imperative of reducing dependence on imported fossil fuels. Only then can they build truly resilient energy systems capable of weathering global market fluctuations.

Ultimately, Africa’s energy crisis is about a fundamental choice between building vulnerable, import-dependent systems and creating robust, self-sustaining ones. While progress has been made in recent years, much more needs to be done to ensure that the continent’s energy future is not forever tied to the whims of global markets.