By Olamide Martins
The continued bombardment of Iran by the United States of America to Israel’s advantage may have again uncovered the dominance of the world’s energy system and the fragility of the least developed and oil-dependent economies. The war in the Middle East is already forcing an increase of about 10 percent on oil prices. Also of concern is the shutdown of the Strait of Hormuz, a 38 km corridor through which about one-fifth of the world’s oil transits, and if the shutdown continues, global prices could remain above $100 per barrel. This shows that the world’s glue to fossil fuels comes with grave consequences.
The toll on Africa is immense. The continent can expect a staggering increase in fuel prices and a rise in food inflation. Nations such as Kenya, Ghana, and Uganda, which are oil-importing, will experience strain in their transportation and production sectors, while states that are oil-exporting might have temporary price spikes but that won’t help their vulnerability to the shocks of the global markets.
The reliance on fossil fuels for Africa as the main source of energy and revenue leaves the continent at the mercy of geopolitical crises beyond its borders. This undue strain and avoidable exposure are affecting fiscal decisions, social interventions, and delaying developments across the region.
This damning reality reveals a broader story: Africa’s energy independence is not impossible. The continent must know that fossil fuels and their so-called associated benefits are tools in the hands of forces beyond the continent’s control. Tension, as seen currently between the US and Iran, and supply disruptions recently observed in Venezuela, can adversely impact Africa and unsettle it. Every increase in fuel price balloons household costs and limits governments’ ability to invest in critical social services and public infrastructures.
Meanwhile, in the middle of this challenge lies a profound window. Africa has enormous renewable energy potential from the striking sun deserts of the Sahel to the vast wind waves along the coasts, and massive hydroelectric prowess in the Congo Basin and beyond. Projects like the Africa Renewable Energy Initiative (AREI) must now receive special attention from the African Union and all member states due to their potential to ensure clean energy across the region. If maximised, it can reduce Africa’s reliance on foreign fuels, facilitate energy access, and reduce the cost of power.
Beyond energy alone, investing in renewable facilities will no doubt support economic diversification as green hydrogen and other clean-tech industries have proven to provide employment, fortify domestic industries, and improve continental trade. Drifting away from a fossil-dependent economy, the continent will immune their economies from external volatility while laying the foundation for lasting growth.
Internally, Nigeria must take a pause and reflect on its growth priorities. These emerging realities and the lessons of the COVID-19 era, when oil exports were stranded in global markets should force a rethink on the government and henceforth inform policy priorities. The country must establish long-term financing instruments outside the global oil price swings that fast-track development. Depending on fossil revenues to finance public expenditures and investing percentages of fossil derivatives in speculative (frontier exploration) are no longer viable strategies, they will only expose the country to unnecessary and avoidable risk.
Ultimately, the ongoing US, Israel – Iran war should rouse Africa, as fragility to global oil shocks is not inevitable; it is a choice accepted by African leaders. Investment in sustainable industrialisation and clean energy remains the only way Africa and Nigeria can turn this period of uncertainties into an era of resilience and self-determination.
Martins, (Associate Director) Extractives and Environment, Corporate Accountability and Public Participation Africa (CAPPA), writes from Lagos, Nigeria