Energy Policy Analysis
In northern Mozambique’s Cabo Delgado province, the Coral South LNG project became operational while insurgent attacks killed dozens and displaced 800,000 people. The province sits atop some of Africa’s largest natural gas reserves, yet local communities feel disrespected, disregarded and abused, awaiting answers from a government they do not trust.
Forced displacements to make way for the project have resulted in people losing their homes and livelihoods. As of March 2020, 556 families had been forcefully relocated, with fishing communities moved 10 kilometres inland, depriving them of traditional fishing grounds.
This contradiction defines Africa’s energy predicament. Just as the continent discovers vast natural gas reserves that could transform energy access for 600 million people without electricity, international climate policy increasingly restricts fossil fuel financing. The question is whether gas can bridge Africa’s energy deficit without undermining climate commitments that shape global investment flows.
The scale of discovery
Algeria recorded the largest natural gas production in Africa in 2023, reaching over 100 billion standard cubic metres, but newer discoveries dwarf established producers. Mozambique’s Rovuma Basin holds over 180 trillion cubic feet of proven reserves, positioning the country among global LNG leaders. The Coral South floating platform began operations in 2022, delivering first gas exports worth approximately Ksh 262 billion ($2 billion) annually.
Tanzania’s offshore fields contain an estimated 57 trillion cubic feet, with Shell and Equinor signing development agreements in 2024. Government projections suggest eventual revenues of Ksh 144 billion ($1.1 billion) yearly. Senegal and Mauritania’s shared Grand Tortue Ahmeyim field reached production in 2023, delivering 2.5 million tonnes of LNG annually.
Industry analysts estimate gas-related projects worth Ksh 32 trillion ($245 billion) in various development stages across Africa. Yet Nigeria has spent billions exploiting its oil and gas reserves in recent decades, but nearly half the country still lives without electricity access, highlighting governance challenges that plague resource-rich countries.
The financing squeeze
The World Bank stopped financing oil and gas extraction in 2019, though recent strategy reviews suggest possible policy changes for specific circumstances. The bank’s current position limits gas financing to exceptional cases where no renewable alternatives exist and clear transition pathways are established.
The African Development Bank reached a significant milestone in 2024 with no fossil-fuel project funding approved. Traditional LNG project development requires Ksh 780 billion to Ksh 1.3 billion ($6-10 billion) in upfront investment. Without multilateral bank support, countries must choose between expensive commercial financing, partnership with Chinese state-owned enterprises, or abandoning projects entirely.
Nigeria’s President Bola Tinubu and Senegal’s former President Macky Sall have repeatedly criticised what they term “climate colonialism”, Western institutions denying Africa the same fossil fuels that powered their own development. Blanket bans on gas finance stifle development, hurt climate goals, and reek of hypocrisy, according to foreign policy analysts.
The bridge or trap debate
Gas proponents present compelling developmental logic. Natural gas burns approximately 50 percent cleaner than coal, offering immediate emissions reductions for countries currently relying on heavy fuel oil or biomass. Gas-fired power plants provide flexible generation that complements intermittent renewable sources, addressing grid stability concerns.
Over 900 million Africans use biomass for household energy, creating health risks and deforestation pressure. Liquefied petroleum gas offers a cleaner alternative that could reduce indoor air pollution deaths while preserving forests. Europe’s post-Ukraine energy crisis sparked renewed LNG demand, creating market opportunities for African producers.
Critics highlight different risks. Methane leaks throughout gas production and transport can negate climate benefits, particularly given Africa’s limited monitoring infrastructure. The International Renewable Energy Agency notes that solar and wind costs have fallen below gas-fired generation in many African markets, suggesting economic advantages for direct renewable investment.
The stranded asset concern looms large. Infrastructure built today operates for 30-40 years, extending well beyond global net-zero targets. McKinsey analysis suggests global gas demand could peak around 2030 under accelerated decarbonisation scenarios, potentially leaving expensive African projects uneconomic.
Lessons from the field
Nigeria’s four-decade gas experience offers instructive contrasts. The country built extensive LNG export capacity and domestic distribution networks, generating substantial revenues. However, governance failures—corruption, community unrest, and environmental damage—limited broader economic benefits. The NLNG Train 7 expansion adds Ksh 131 billion ($1 billion) in annual government revenues, yet chronic gas flaring continues despite legal requirements.
Mozambique represents a different model focused on large-scale export infrastructure with limited domestic integration. TotalEnergies declared force majeure in April 2021 due to Islamic State-linked insurgent attacks in Palma, Cabo Delgado, halting construction and withdrawing personnel. While multiple factors contribute to the conflict, competition over gas revenues and inadequate benefit-sharing mechanisms clearly played a role.
Tanzania chose a more cautious approach, demanding majority government participation in gas projects and emphasising domestic supply obligations. Development has proceeded slowly, with financing delays and technical challenges. Morocco pursued hybrid development, combining gas imports with aggressive renewable energy deployment, providing energy security while building clean energy expertise.
Community costs
Almost 100,000 people have been displaced in 2024 alone in Mozambique, lifting the total number displaced from the uprising to over 700,000. Fishing communities have been moved 10 kilometres inland, depriving them of traditional livelihoods. According to human rights analysts, “This project carries an extensive spectrum of risks – specifically around human rights violations”.
Nigeria’s Niger Delta offers another cautionary example. Despite decades of oil and gas revenues, most communities remain impoverished while suffering environmental degradation. The Movement for the Emancipation of the Niger Delta emerged partly from grievances over inequitable resource sharing, demonstrating political risks of extractive development without inclusive benefits.
The climate reality
Africa’s cumulative oil and gas production accounts for 9.5% of global cumulative production, while remaining recoverable reserves represent 8.6% of world totals. The continent’s minimal historical emissions, less than 3 percent of cumulative global carbon dioxide, support arguments for differentiated responsibilities.
Yet global carbon budgets remain finite regardless of emissions sources. The Intergovernmental Panel on Climate Change estimates remaining carbon budgets compatible with 1.5°C warming at approximately 500 billion tonnes of CO2. Full exploitation of African gas reserves would consume a significant portion of this budget, potentially preventing achievement of global climate goals.
Pragmatism
Africa’s gas development strategy should acknowledge both development imperatives and climate constraints. The optimal approach involves selective, strategic gas use while accelerating renewable energy deployment.
First, prioritise gas for domestic energy security rather than export revenues. Using gas to replace diesel generators and provide grid stability directly benefits local populations while supporting industrial development. Export-focused projects generate foreign exchange but create fewer local jobs and face greater market risks.
Second, mandate renewable energy integration in all new gas projects. Hybrid facilities combining gas turbines with solar or wind generation provide immediate emissions reductions while building clean energy capacity. This approach also develops technical expertise in renewable energy management.
Third, implement transparent governance mechanisms to prevent resource curse dynamics. Establish sovereign wealth funds for gas revenues, mandate environmental monitoring, and require community benefit-sharing agreements. These measures address legitimate concerns about extractive industry impacts.
Fourth, maintain flexibility for technology transitions. Design gas infrastructure to accommodate future conversion to hydrogen or biogas as these technologies mature. This prevents lock-in effects while supporting current energy needs.
Finally, pursue regional cooperation to maximise benefits and minimise risks. Shared infrastructure reduces costs while spreading political risks across multiple countries.
The verdict
Africa’s gas gambit represents a calculated risk in an uncertain global energy transition. The continent cannot afford to remain energy-poor while waiting for renewable technologies to achieve full scalability and affordability. Equally, it cannot ignore climate constraints that increasingly shape international investment and trade relationships.
The path forward requires accepting gas as a temporary necessity while maintaining clear transition commitments. This approach demands political courage to resist both industry pressures for long-term commitments and activist demands for immediate abandonment of all fossil fuels.
Success depends on governance quality, community engagement, and integration with renewable energy development. Countries that manage these challenges effectively can use gas to bootstrap economic development while building foundations for clean energy transitions. Those that fail risk perpetuating resource curse dynamics while contributing to global climate problems.
The choice facing African policymakers is not between perfect options but between imperfect alternatives. Communities need reliable electricity to power schools, hospitals, and economic development. The question is whether gas can provide this foundation while preserving climate stability that future generations will inherit.
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Compiled by EB Analysis Desk
