Balancing the Prospects of African Fossil Fuels: Navigating the Shift towards Renewables

Originally written for Inc.Africa, this article by Paul Baker and Zahraa Beeharry explores the challenges and opportunities faced by African countries as they navigate the complex landscape of energy investments.

As Europe seeks alternatives to Russian oil, African fossil fuels have gained attention as potential sources. However, the shift towards renewable energy globally raises questions about the viability of investing in oil and gas for the long term. Africa faces an urgent need to improve access to energy for its growing population, but a significant shortfall in energy supply is anticipated without appropriate measures.

Countries seeking oil and gas concessions in Africa should consider linking such deals to carbon offset investments in sustainable and clean energy. Access to clean and affordable energy is crucial for inclusive growth and development, improving lives, health, educational opportunities, and business prospects within economies.

While Europe's increasing interest in African oil and gas is encouraging, it should be seen as a short- to medium-term solution. The newly established African Energy Transition Bank (AETB) aims to promote private-sector investments in oil and gas, positioning Africa as the final frontier for exploration. However, with the world moving towards renewables, it is essential to consider long-term energy investments.

Investments in renewable energy can drive significant economic growth and cross-cutting benefits, such as improvements in human welfare, gender equality, poverty alleviation, and food security. The continent has enormous potential to become a leader in clean energy, with solar energy from the Sahara Desert alone theoretically capable of exceeding global energy demand fourfold.

Rather than relying on fossil fuels, future financing and investments in Africa should prioritize clean, efficient, and renewable energy. Transitioning to renewable sources can boost global GDP and align with changing consumer preferences towards sustainability. Investments in oil and gas should be seen as stop-gap measures and should be structured to support carbon offset investments in sustainable and clean energy.

For Africa to achieve its net-zero targets by 2050, an estimated $2.8 trillion in investment is needed. Embracing renewable energy will not only support economic growth but also contribute to a more sustainable and environmentally conscious future.

Read the full article on Inc.Africa.