Foreign Involvement for a ‘Greener’ Future: Africa’s Journey to Reaching Maximum Renewable Energy Potential
Africa’s journey to a continental sustainable transition has been anything but smooth sailing. Countless instances of resource-driven foreign intervention in African states set a precedent for a future of foreign investments with relatively less gains for Africa, and more for investing parties. By the start of World War I, 90 percent of Africa was under European control; colonial powers divided Africa in their best interest, undermining preexisting cultural, governance, and economic ties. This established an ongoing, seemingly impenetrable narrative: Africa’s resources are for everyone, not Africa.
Since then, extractive relationships have evolved from traditional colonialism to a wave of foreign direct investment, furthering the influence of external powers in Africa’s internal development. Desired natural resources have shifted from primarily gold, diamonds, and copper to natural gas, rare earth minerals, and oil. Africa’s natural abundance in these highly-demanded reserves continues to shape the continent’s role in ‘green’ energy development.
In 2024 alone, Africa hosted $97 billion in foreign direct investment (FDI), a 75 percent increase from 2023. Emerging ‘green’ innovation and existing tech-driven industries are playing a key part in this increase. These technologies need Africa’s raw materials to fuel their advancement while meeting increasing demands, and investors are seeking the cheapest method of sourcing. Global rare earth mineral demand is expected to reach at least three times current levels in the next 15 years, making Africa’s 15 percent share of world reserves essential to a ‘green’ future.
As best interests continue to drive foreign investment, especially in renewables, climate change cooperation faces pushback among leading energy economies, such as China, the United States, and Russia. To fulfill demand expectations, top producers are looking to diversify from domestic markets. This is especially advantageous for countries with a smaller share in the mining and refining markets looking to expand, such as the United States. However, to successfully enter international markets, these countries must compete with China, a dominating force in the world’s critical mineral supply.
Despite the immense earnings potential from diversifying energy supply, President Trump’s administration prioritizes “putting America first”, placing environmental agreements and international partnerships on the back burner. This year alone, the U.S. withdrew from the United Nations Framework Convention on Climate Change, the Paris Agreement, and reaffirmed a national interest in oil and natural gas production.
Trump’s isolationist mentality has proven motivating for energy-driven FDI in Africa and can be seen as the U.S. ‘backing down’ from a needed ‘green’ transition. Seeing this, Russia has bolstered existing relationships while fostering, and in some ways forcing, new ones with Morocco, Burkina Faso, and Mali. Similarly, China capitalizes on regions of opportunity, notably sub-Saharan Africa, for renewable energy processing and infrastructure implementation.
Consider lithium, an essential component of the magnets that power EVs, solar panels, and wind turbines. China, along with Chile and Australia, is a top contributor to the global lithium supply. In Africa, approximately five percent of the world’s lithium reserves are concentrated in Zimbabwe, Ghana, Namibia, Mali, and the Democratic Republic of Congo. Zimbabwe, a top 10 global lithium producer with the largest lithium reserves in Africa, attracted $1 billion in investment, largely thanks to Chinese mining conglomerates. This pattern continues in countries of opportunity.
In May 2024, Avatar New Energy Materials, a Chinese firm, built Africa’s largest lithium processing plant in Nigeria, with plans for another underway. Avatar is one of several firms assuring employment opportunities and capital inflow in exchange for the ‘go-ahead’ on infrastructure projects. However, these empty promises discourage Africa from investing in mining and processing technology internally. In 2021, sub-Saharan Africa’s mining exploration budget was the second lowest in the world. Additionally, existing exploratory projects are focused on gold extraction instead of green metals.
To circumvent limited domestic mining activity, some African countries are turning to long-term plans for ‘green’ energy disbursement. For Rwanda and Kenya, this looks like outlining key climate mitigation strategies with implementation deadlines by 2030. Kenya and Rwanda, both highly vulnerable to the effects of climate change, are championing renewable energy strategies to initiate positive changes in their domestic energy markets. Although ambitious, both states’ visions for renewable energy implementation can serve as models for the needed domestically backed development that could pioneer Africa’s journey to realizing its astounding energy potential.
In Rwanda, solar power will be integral in delivering universal electricity access by 2030. In September 2023, Kenya hosted 20 heads of state at the first Africa Climate Summit, resulting in the formal recognition of shared decarbonization and ‘green’ finance targets. Today, 90 percent of energy production in Kenya is renewably sourced. Strides in renewable energy accessibility projects should not go unnoticed; however, it is important to recognize a common challenge in realizing these plans–money. To meet climate goals, Kenya needs $40 billion in investment, and Rwanda $38 billion. Thus, the dangerous cycle of FDI begins, with African nations in need of funds and international donors in need of resources.
Though foreign investment can benefit Africa’s energy projects, it also shapes motivations and methods for implementation, often undermining the best interests of African people. Climate-related disasters are worsening globally, especially in climate-vulnerable regions, yet leading contributors, China and the United States, are impacted the least. This leaves developing nations, including those in sub-Saharan Africa, with the burden of responsibility to mitigate climate change while reaping the consequences of Western carbon-heavy industrialization. Multilaterally, this burden is recognized, yet little has been effective in issuing accountability to developed nations for their not-so eco-friendly development.