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Decades of oil and gas extraction have failed to deliver inclusive development in 13 African producer states.
Instead, fossil fuel dependence has deepened poverty and heightened exposure to global price shocks.
It has also entrenched foreign corporate control and left economies vulnerable.
Many citizens still living on less than $3 a day despite vast reserves.
Decades of oil and gas extraction across Africa have deepened poverty, weakened economies and increased dependence on volatile global fuel markets instead of delivering broad-based development, according to a new report by Power Shift Africa and Oil Change International.
The report, Pipe Dreams: How Oil and Gas Fail to Deliver Economic Development in Africa, analysed evidence from 13 African oil- and gas-producing countries and concluded that fossil fuels have “not delivered sustained or inclusive economic development”, and instead contributed to economic vulnerability, inequality and debt dependence.
The findings came amid a fresh global energy shock triggered by the United States-Israeli war on Iran, which the report said has exposed Africa’s dependence on imported fuels despite the continent’s vast oil and gas reserves. Many African countries export crude oil while importing refined fuels such as diesel and gasoline, leaving them vulnerable to global price shocks.
In 2023, 57 per cent of oil products consumed in Africa were imported. Nigeria exported 97 per cent of its crude oil production, while importing nearly all refined fuel before the opening of the Dangote refinery. Angola exported 94 per cent of crude production, while importing most refined fuels. Ghana exported 91 per cent of crude oil and imported 96 per cent of refined fuels.
The conflict in West Asia has sharply worsened the crisis, the authors noted in the report. Diesel prices rose by 40 per cent in Sierra Leone, 39 per cent in Zimbabwe and 35 per cent in Malawi between February and April 2026. In South Africa, the price of illuminating paraffin used by poorer households reportedly doubled, forcing many families to shift back to firewood and charcoal for cooking.
The report linked rising fuel costs to broader economic instability. The United Nations Economic Commission for Africa estimated that a 10 per cent increase in energy prices could raise inflation in African economies by 1.7 percentage points. The African Development Bank projected inflation in 2026 at 17 per cent in Nigeria and 75 per cent in Sudan. The International Monetary Fund also lowered its African growth forecast for 2026 from 4.6 per cent to 4.3 per cent after the Iran conflict.
Despite decades of extraction, poverty remains widespread in many oil-producing countries. Around 40 per cent of people in major producers such as Nigeria and Angola still live in extreme poverty on less than $3 a day, the report states.
The analysis identified several recurring features of Africa’s fossil fuel economies, such as foreign corporate dominance, weak links with local industries, corruption, environmental damage and debt vulnerability. Foreign multinational firms control most oil and gas production across the continent, while governments often receive limited revenues due to weak contracts and tax concessions, the analysts highlighted.
The report also questioned claims that fossil fuel extraction creates large-scale employment. In Nigeria, the oil industry employs just 0.01 per cent of the workforce, the analysis showed. Environmental damage has further harmed local livelihoods. Between 2011 and 2025, more than 15,000 oil spills were recorded in Nigeria’s Niger Delta, affecting farming and fishing communities.
The authors warned that Africa’s fossil fuel dependence now faces another challenge, as global demand for oil and gas is expected to peak around 2030. Countries including Uganda, Mozambique and Namibia risk investing heavily in projects that could later become stranded assets.
Instead, the report presented renewable energy as Africa’s “real path to development, security and resilience”. It argued that decentralised renewable systems, such as solar mini-grids and rooftop solar, can expand electricity access faster, reduce import dependence and create more jobs than fossil fuels. “Fossil fuels are not a viable foundation for equitable economic development in Africa,” the report concluded.