By: David Shoombe
The African Development Bank’s latest African Economic Outlook advises African states to diversify their energy mix and markets as precautionary measures against disruptions such as geopolitical tensions.
As part of the medium to long-term policy recommendation, the Continental Bank states that Africa should increase domestic investment in renewable energy sources.
This is to reduce the reliance on oil imports and provide alternative green energy sources for the continent’s development.
The bank also notes that “Africa should fast-track full implementation of energy projects identified under the Programme for Infrastructure Development in Africa (PIDA) to strengthen the continent’s energy security.”
The economic outlook indicates that real GDP growth is projected to moderate to 4.2% in 2026 before recovering to 4.4% in 2027.
However, the bank added that “Assuming the conflict lasts for 3–6 months before a gradual de-escalation of tensions, real GDP growth is projected to decline by 0.4 percentage points to 4.0% in 2026.”
Over-dependency on external supplies of oil has threatened the continent’s economic and human development.
According to the Africa Energy Investment Report of 2025, 600 million people across Africa lack reliable electricity access, making the need for added investment clearer.
The report further notes that Africa’s investment in clean energy reached $15.2 billion in 2023 through various green projects.
On industrialisation ambitions, the report states that “Investment and funding continues favouring countries with relatively predictable returns, stable policy environments, and stronger financial systems. Markets like South Africa, Egypt, Morocco, Kenya, and Nigeria dominate both public and private investment inflows.”
That said, there have been examples of investments into alternative forms of energy in numerous African nations to expand their domestic energy capacity.
At the recent Nuclear Energy Innovation Summit for Africa (NEISA), Rwandan Minister of Information Communication and Technology, Paula Ingabire, stated that Rwanda has secured investment for a nuclear power plant by 2030 to support technological innovation.
Ingabire noted that “Rwanda’s growing data centre industry reflects the country’s ambition to invest in a 100-megawatt data centre project valued at $5 billion with potential to generate $220 million in annual revenue.”
Moreover, Ethiopia managed to finance the Grand Ethiopian Renaissance Dam (GERD) using its own domestic resources, to the tune of $5 billion. The fundamental aim of the dam is to produce hydroelectricity.
AfDB’s report recommendations centre around strengthening Africa’s financial prudence and self-reliance.
This comes as the continent’s total public debt grew by about 4.4% annually between 2020 and 2024, increasing from $1.6 trillion to $1.9 trillion.
