As global climate deadlines loom, a critical new analysis argues that African leaders must look beyond simply generating more renewable power. The real challenge is ensuring the continent's green energy shift actively supports and accelerates its broader economic development goals.
Beyond Green Electrons: The Development Imperative
The latest report from the Africa Expert Panel, established under South Africa's G20 presidency, delivers a clear message. A climate strategy focused solely on green energy risks delivering environmental gains without the crucial development dividends the continent urgently needs. While Africa's greenhouse gas emissions remain low on average, profound economic and debt pressures threaten its ability to decarbonise and build resilience.
The report, released on 22 December 2025 and authored by Saliem Fakir of the African Climate Foundation, calls for a fundamental rethink. Any credible plan must marry coordinated debt relief with growth-oriented, low-carbon development. This is vital to channel investment in ways that support durable, broad-based progress.
Africa's renewable potential is undeniably vast. The continent already has nearly 34 gigawatts of installed hydropower, with major projects like the 6.5 GW Grand Ethiopian Renaissance Dam soon coming online. Its solar potential is estimated at a staggering 7,900 GW, with installed capacity growing by 54% yearly between 2011 and 2020. Wind resources hold 461 GW of technical potential, and the East African Rift alone has roughly 15 GW of untapped geothermal energy.
But the panel stresses that counting potential green electrons is not the core task. The real work is ensuring clean-energy investments directly help African nations achieve their development ambitions.
Key Challenges on the Path to a Green Future
To translate potential into prosperity, policymakers must tackle several interconnected issues. First, they must understand the roots of the continent's development problems. Many sub-Saharan economies remain trapped in over-reliance on commodity and raw-material exports, a path that creates structural imbalances and stifles other sectors.
Nigeria offers a stark case study. Before its oil boom, the country had a vibrant agricultural sector. However, surging oil revenues in the 1970s caused agricultural exports to fall by 17%. This classic "Dutch disease" has left the economy acutely vulnerable to price shocks, highlighting the dangers of a single-commodity focus.
Second, scaling climate-aligned investment requires a transparent view of Africa's debt landscape—its scale, makeup, and stabilization pathways. New borrowing must be tightly linked to productivity gains and economic resilience. In the near term, this means strengthening sectors like agriculture and tourism while building a foundation for higher-value goods and services.
The cocoa industry in Ghana and Côte d'Ivoire illustrates the missed opportunities. Together, they produce roughly half the world's cocoa, but limited investment in R&D and processing means most of the final product's value is captured elsewhere, leaving both economies exposed.
Third, global policies like the European Union's Carbon Border Adjustment Mechanism will hit carbon-intensive exports hard. This underscores the urgent need to move beyond the "grow now, clean up later" model. For nations like South Africa, bolstering competitiveness means pairing decarbonisation with industrialisation and genuine economic diversification.
A Coherent Long-Term Vision is Non-Negotiable
Fourth, with borrowing costs soaring across much of Africa, misallocating capital would be especially costly for highly indebted nations. It is critical to focus on green-growth initiatives that deliver tangible productivity gains and economic opportunities. Affordable, reliable electricity remains the bedrock for realising Africa's productive potential and integrating its young, urbanising population into the global economy.
Firms in Senegal's Diamniadio special economic zone, for example, already cite high electricity costs as a major blow to their competitiveness.
Finally, the report concludes that African leaders need a clear, long-term vision for what their economies should look like in two to three decades. Climate solutions must do more than reduce emissions; they must create pathways for countries to move up the value chain and participate in developing tomorrow's technologies.
The 21st century is an ideas economy, where nations compete by developing solutions to global challenges. Done right, climate investment can nurture dynamic, innovation-driven African economies. But this demands a coherent and ambitious vision for the economic trajectory the continent seeks to follow.
