African economies are facing mounting pressure from volatile global oil prices linked to the ongoing Gulf conflict, with analysts warning that small and medium-sized enterprises (SMEs) are bearing the brunt of rising energy costs.
Brent crude prices surged from $81 per barrel on March 3 to $112 on March 12 before easing to $98 by March 25, underscoring the instability affecting fuel-dependent economies.
Across the continent, businesses reliant on diesel-powered generators are grappling with escalating operational costs and unreliable supply chains.
The impact is particularly severe in countries where grid infrastructure remains constrained. In South Africa, for example, persistent load shedding has pushed many businesses toward diesel generation, exposing them further to international fuel price shocks.
Disruptions around the Strait of Hormuz have compounded supply uncertainties.
Fuel prices have spiked sharply across multiple African markets. In Nigeria, petrol prices have exceeded ₦1,000 per liter — a nearly 40% increase since February — while Zimbabwe now records some of the highest fuel costs in the Southern African region, with diesel averaging above $2 per liter.
Botswana and Uganda are also experiencing sustained price volatility.
Against this backdrop, energy analysts and industry stakeholders are increasingly revisiting coal as a viable alternative for power generation.
With substantial reserves across countries such as Nigeria, Zimbabwe, Botswana and Uganda, coal is being positioned as a domestic resource that could stabilise electricity costs and reduce dependence on imported fuels.
Advocates argue that coal-fired power offers a more predictable and affordable energy source for SMEs, enabling better long-term planning and shielding businesses from global supply shocks.
“When African businesses are being crushed by imported fuel costs, using domestic coal to keep factories running and SMEs alive is not a step backward — it is a rational act of economic self-defense,” said NJ Ayuk.
The debate is expected to feature prominently at African Energy Week 2026, scheduled for October 12–16 in Cape Town, SouthAfrica.
The event will explore the role of coal within Africa’s evolving energy mix, including discussions on clean coal technologies, financing models and strategies to balance energy security with environmental considerations.
As geopolitical tensions continue to drive energy market uncertainty, policymakers are increasingly confronted with a complex trade-off: balancing sustainability goals with the urgent need for reliable and affordable power to sustain economic growth.
By Winston Mwale, Africa Brief