Can Africa’s petroleum revenues power a green future or is it mere talk?

In a world racing toward clean energy, Africa finds itself in a tough spot. While global investment in clean energy now outpaces investment in fossil fuels, Africa accounts for less than three per cent of global clean energy funding despite its vast renewable energy potential.  Meanwhile, many African nations are still banking on oil and gas to develop their economies.  

But here’s the big question: are African governments committed to using money from their fossil fuels to finance a green, renewable future? Leaders across the continent have echoed this logic in high-level conferences and national energy transition plans. It sounds like a smart idea—use what you have to build what you need. However, when you peel back the layers, a more complicated and less inspiring reality unfolds. 

A legal maze with no guarantees 

Take Ghana, for instance. The country’s Petroleum Revenue Management Act (PRMA) of 2011 allows oil revenues to be spent on “alternative energy sources,” which includes renewables. Great, right? But here’s the catch: this provision is optional, not mandatory. The finance minister picks just four out of twelve spending priorities every three years, and renewable energy rarely makes the cut. The law gives the green light, but no one’s hitting the gas, despite the energy commission’s vision of having renewable energy contributing to 10 per cent of the country’s total energy consumption by 2030. 

Uganda’s story is even murkier. The Public Finance Management Act, 2015 says petroleum revenues can fund “infrastructure and development projects of government,” but falls short of specifying what that means. Unless Parliament or the finance minister prioritises it—and there’s no legal requirement that they must—oil money will likely keep going elsewhere. So, even though Uganda’s energy transition plans sound ambitious, the law doesn’t put money where the country’s mouth is. 

Kenya and Nigeria have set up structures to promote renewables, such as Kenya’s Energy and Climate Change Acts and Nigeria’s Petroleum Industry Act (PIA) of 2021. But neither country mandates that petroleum revenues be earmarked for renewable energy. Nigeria’s PIA talks about cleaner technologies but skips the crucial step of setting up a renewable energy fund. That’s like planning to advance your education without setting aside some money for the same. 

Senegal’s petroleum code declares that petroleum belongs to the people and creates two national funds to manage revenues from the resource. These could—in theory—support renewable energy. But again, there’s no specific legal requirement. Still, Senegal offers an interesting experience. Despite the legal vacuum, the country’s Sovereign Strategic Investment Fund (FONSIS) is actively involved in the renewable energy sector, notably through the launch of a fund dedicated to accelerating renewable energy and energy efficiency projects, and through direct investments in solar power plants. However, the absence of policies that set indicators on how oil and gas revenues will finance the green transition is inconsistent with the government’s long-term commitment to a fossil fuel phase-out strategy. 

The same old story 

Here’s the uncomfortable truth: most African countries lack clear, binding rules that say, “This percentage of petroleum revenues must go into renewable energy.” Without such laws, the revenues end up funding roads, civil service salaries, or get lost in bureaucratic limbo. Despite years of civil society advocacy for investments in renewable energy, health, agriculture, and education—sectors that can truly reduce inequality—the money often goes elsewhere. 

And who can blame them? Governments are under intense pressure. Debt is piling up. Domestic revenues are weak. Infrastructure needs are huge. So, when petroleum money comes in, the temptation to plug budget holes or even fund flashy legacy projects is almost irresistible. 

All is not lost 

Despite these challenges, there’s a real opportunity here—if governments and civil society are willing to act. First, countries need to reform their laws. That means going beyond optional clauses and making it legally binding that a certain share of oil revenues is invested in renewable energy-enough to kickstart the green economy and prove that this idea is more than empty rhetoric. 

Second, there must be transparency. Citizens deserve to know where oil and gas money is going. Governments should publish reports, host public dialogues, and create digital dashboards that track every dollar. Let people see how much is going into solar, wind, and other clean energy projects. Let’s demystify the budget process. 

Third, community engagement is vital. Renewable energy should not just be a top-down directive. It needs to reflect what local communities want and need—whether it’s solar panels for schools, mini-grids for rural clinics, or training for youth in green jobs. When citizens feel ownership, projects succeed. 

Finally, country-to-country lesson learning and sharing will enable continuous policy development and improvement. This should not be ad hoc but must be prioritised in spaces like the African Peer Review Mechanism. Continuous collaboration between national governments and regional agencies like the African Mineral Development Centre (AMDC) and African Energy Commission will facilitate fit-for-purpose policies to promote a shift away from mere extraction of raw materials to affordable and accessible renewable energy solutions.  

Let’s turn access to clean energy in Africa from a catchy soundbite into a continent-wide movement. Let’s make the future green—and make it now. 

Gerald Byarugaba is Extractive Industries Advisor at Oxfam in Africa 

Richard Hato-Kuevor is Just Economy Program and Policy Manager at Oxfam in Ghana

Views expressed are the authors’ own and do not necessarily reflect those of Down To Earth