Energy Future for Africa

Ahonsi Unuigbe

Africa Day is an emblematic day that underscores our unity, cultural richness, and collective potential.  On this year’s annual observance of Africa Day, I found myself reflecting yet again on one of the most pressing challenges our continent faces today—energy poverty. Despite considerable strides towards technological advancement and economic development, a significant & unacceptable portion of Africa remains quite literally, in the dark.

This is why, even though I have participated in numerous boardroom discussions focused on ‘the pressing need for Africa to transition,’ my position remains unchanged. For me the word ‘transition’ implies a mastery and utilisation of a resource, allowing for a subsequent move beyond it. Unfortunately, this does not reflect Africa’s current reality.

The continent has substantial reserves of oil and natural gas, yet a significant energy paradox exists. Whilst home to 15% of the world’s population, Africa accounts for less than 5% of global energy use; a contradiction that becomes even more stark if you exclude North-Africa. Testament to this disparity is the fact that over 600 million Africans lack access to electricity, and around 900 million are without adequate cooking facilities.  These critical shortages hinder economic growth and continue to deepen poverty and inequality across the continent.

So, while ongoing global discussions often focus on a linear energy transition which centres around renewable energy, for Africa, the reality is fundamentally different. Our focus for now needs to be on the provision of basic access to reliable and affordable energy, full stop.

This provision is only possible if the continent continues to explore ALL available sources of energy, including traditional resources like oil and gas, which the continent has in abundance. These resources are not only pivotal for immediate, scalable energy access, but also for sustainable economic development.

Expanding energy access is a powerful catalyst for economic development, with far-reaching effects across multiple sectors; access to energy stimulates the expansion of local industries, from agriculture to manufacturing to technology, which are crucial for the economic independence and sustainability of a region. It also encourages entrepreneurship by lowering the barriers to entry for small businesses and startups, which are vital for innovation and competition.

 Beyond economic implications, energy access is essential for enhancing our quality of life. It supports healthcare, education, and improves general living conditions. Energy reliability reduces household burdens, freeing up time for productive endeavours, specifically benefiting women and children, which is especially relevant given our predominantly youthful population.

 The stark reality is that Africa is resource rich but energy poor. But it does not mean that an energy transition is impossible, it does however mean that any transition must remain realistic and balanced, addressing the continent’s immediate needs and reflecting its unique developmental stage.

At Petralon Energy, our vision for the coming decade is to contribute meaningfully to enhancing energy access across Africa. To achieve this ambitious goal, we aim to continue to establish robust partnerships both within the continent and globally. However, we must heed the lessons of the past and carefully manage our reliance on any support, regardless of origin to prevent the creation of dependencies that may inadvertently work against our needs.

To counter these risks, it is crucial to lay an emphasis on fostering intra-African partnerships that enhance local capacity and leverage our own resources and capital. By prioritising strategies that strengthen local collaboration and resource utilisation, we can ensure that Africa shapes its own energy future, with careful support and learnings from  well-meaning global partners.

Petralon Energy is proud to be part of a select group of indigenous oil and gas players, raising significant private capital on our own terms, strengthening our resources. By doing this, we ensure that our solutions are tailored to meet the specific needs and challenges of African communities, drawing on a deep understanding of the continent’s realities. I am reminded here of an old African adage, “It is he who lives in the house that knows where the roof leaks”, therefore, any solutions we develop must directly address our unique challenges to be truly effective.

Addressing energy poverty in Africa is not just about lighting homes; it’s about igniting potential and powering dreams. Energy is the cornerstone of modern economies, and without it, there is no sustainable development, no advancement in healthcare, education, or industry. As we reflect on the unity and solidarity that Africa Day symbolises, it is imperative that we harness our collective efforts to transform this vision into reality.

•Ahonsi is an investment-banker by training and is the Founder & CEO of Petralon Energy. He is also Chairman of the Board of Nigeria Exchange Ltd.