Decades of oil and gas extraction across Africa have failed to lift millions out of poverty, with a new report arguing that fossil fuel wealth has instead fueled inequality, debt, corruption and economic instability across the continent.
The report, titled Pipe Dreams: How Oil and Gas Fail to Deliver Economic Development in Africa, was released by Power Shift Africa and advocacy group Oil Change International.
Drawing from evidence in 13 African oil and gas-producing countries, the report says major producers such as Nigeria and Angola still have nearly 40 per cent of their populations living in extreme poverty despite decades of extraction.
“The promise that fossil fuels will deliver development has not and will not be realised. Across Africa’s oil-producing countries, evidence shows that fossil fuels have enriched the wealthy few, undermined economic development, and left economies exposed to external shocks,” the report stated.
According to the report, the revenues have largely benefited multinational corporations and political elites while communities continue to face pollution, unemployment and economic hardship.
According to the report, oil-producing economies have become heavily dependent on volatile global energy markets, leaving them vulnerable to price shocks and debt crises.
The report notes that the oil and gas industry creates relatively few jobs despite generating billions in revenues.
In Nigeria, for example, the oil industry reportedly employs only 0.01 per cent of the country’s workforce, while in Angola the sector accounts for just 0.3 per cent.
Researchers also pointed to environmental destruction in oil-producing regions such as Nigeria’s Niger Delta, where repeated oil spills and gas flaring have damaged farming and fishing livelihoods for decades.
The findings come at a time when several African countries are expanding oil and gas exploration projects, with governments arguing that fossil fuel revenues are necessary for economic growth and industrialisation.
However, the report warns that newer producers, including Uganda, Mozambique, Namibia and Tanzania, risk investing heavily in projects that could become unprofitable as the world accelerates its transition to renewable energy.
Beyond poverty concerns, the report highlights what it describes as a major contradiction within Africa’s oil economies: many oil-producing countries continue to import expensive refined fuel despite exporting large volumes of crude oil.
Speaking during the launch of the report, Power Shift Africa Founding Director Mohamed Adow said the findings are difficult to ignore and that oil and gas wealth has failed to translate into broad-based prosperity for ordinary Africans.
“Many fossil fuel-rich countries remain energy poor, while wealth flows outward and communities closest to extraction continue to be underserved. This is one of the great contradictions of our time: Africa exports energy while millions of Africans still cook with charcoal and lack reliable electricity,” he said.
“The issue is neither a lack of resources nor a lack of potential. The problem is an extractive economic model designed primarily around exports and multinational profits, rather than building resilient local economies and delivering energy access for people. Locking countries into another generation of fossil fuel dependence is not the pathway to shared prosperity.’’
In 2023, about 57 per cent of oil products consumed in Africa were imported, according to the report. Countries including Nigeria, Angola and Ghana export most of their crude oil while importing refined products such as diesel and petrol at higher prices.
The report says this dependence has worsened economic pressures following the recent global energy crisis linked to conflict in the Middle East, which pushed up international fuel prices.
In Nigeria, petrol prices reportedly rose sharply despite the opening of the Dangote Refinery, Africa’s largest refinery, because crude oil is still traded at international market prices.
Oil Change International Africa Director Thuli Makama said the current geopolitical conflict has once again laid bare just how volatile and unjust this system is, driving up energy and food prices.
“Oil and gas have not and will not deliver development for Africa. Instead, this model concentrates wealth in the hands of multinational corporations and political elites, while communities are harmed by pollution, lost livelihoods, and rising costs of living. The only way forward is a shift to renewable energy that puts people first and delivers real, lasting development,” she said..
Researchers argue that the current system prioritises exports over domestic energy access, even as nearly 600 million Africans still lack electricity.
“Invoking the 600 million Africans without power while prioritising LNG and crude exports exposes a contradiction. These investments are not designed to electrify African homes or support local industry, but to serve export markets and maximise profits,” it stated.
The report instead calls for African governments to accelerate investments in renewable energy, saying clean energy could create up to 14 million jobs across the continent by 2030 while improving energy access and reducing dependence on imported fuels.
