View / The energy trap at the heart of Africa’s stalled industrialization

Many African states have produced vision documents pledging economic transformation through value addition and industrialization. But these ambitions confront an unforgiving climb defined by power deficits and a global economy that is far less accommodating than it was for earlier industrializers. More challenging, however, is the fact that no country has become high-income with low-energy consumption — and the continent’s energy constraint is stark.

Today, just 20% of Africa’s population, concentrated in South Africa and North Africa, generates over 65% of the continent’s electricity. Not coincidentally, these regions are also the most industrialized. Across the continent, industrial potential is held back by four structural energy faults: Costly and unreliable power supply; poor power infrastructure; inadequate, power-stifling domestic value retention; and industrial planning that is disconnected from energy planning. Many large power plants generate electricity that never meets local demand because distribution and demand stimulation are an afterthought.

The result is a self-reinforcing cycle of low energy, low productivity, and economic concentration in extraction and agriculture, while higher-value industrial growth stalls or withers.

Africa’s resource and demographic fundamentals are promising. The continent hosts major deposits of copper, lithium, cobalt, and other materials central to the global energy transition. Its workforce is young, and its proximity to global markets offers advantage, but none of this matters if factories cannot run consistently. Incremental fixes — isolated plants, mini-grids, ad-hoc backups — do not deliver structural transformation. Compounding the problem, major development partners have inverted the historical sequence by prioritizing universal household access before securing large-scale industrial power. Historically, no region has industrialized that way.

This means these countries need to prioritize industrial demand alongside household access while linking energy planning with industrial strategy to coordinate generation, transmission, distribution, and demand stimulation. They must also reform utilities to support industrial growth and competitiveness by leveraging Africa’s energy endowment in both fossil fuels and renewables to build a diverse, resilient mix.

The good news is that many African countries are already moving to convert their industrialization visions into reality, as a wave of outright bans and partial restrictions on exporting unprocessed raw materials sweeps the continent. That trend coincides with a surge in global demand for the continent’s minerals, as the US, Europe, and parts of Asia seek alternatives to China-dominated supply chains.

Unsurprisingly, this renewed interest remains overwhelmingly extractive. There are no serious plans to process these minerals on the continent. African governments must not accept that omission as fait accompli, especially because it presents an opportunity. They must convert mineral demand into leverage and a catalyst for growth, forcing local development that anchors large, reliable energy demand. That energy can then underwrite broader industrial activity. Repeating the familiar pattern — exporting raw materials and importing finished goods — would not merely stall industrialization; it would foreclose it entirely, extinguishing the continent’s most credible path out of poverty.

History makes the constraint clear. An IMF working paper shows that the Asian “miracles,” and earlier industrial powers, shared one trait: Industrial policy was central to their rise. Strip that lesson further and a hard truth remains: Industrial policy rests on cheap, reliable, large-scale energy. Without it, the path to prosperity does not exist — and Africa risks remaining trapped in a low-energy, low-productivity equilibrium.

W. Gyude Moore is Liberia’s former minister of public works and currently a distinguished fellow at the Energy for Growth Hub.

Meron Tesfaye is the Innovation Director at the Energy for Growth Hub. Before joining, she worked as a senior policy analyst at the Bipartisan Policy Center in Washington, DC.