TUNIS, TUNISIA—The US/Israel-Iran war is confronting African economies with a brutal reckoning. Once again, most of the continent finds itself at the mercy of volatile global oil and gas markets, owing to energy-system dependencies and structural deficiencies rooted in decades of neocolonialism. With oil prices shooting above $100 per barrel, African economies need to embrace a strategic push toward clean-energy sovereignty.

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Anyone following the news now knows that the Strait of Hormuz is a critical global chokepoint, through which roughly one-fifth of global oil supply flows. Disruptions there will send inflationary reverberations throughout the broader global economy, including African countries that are not even direct buyers of Gulf oil.

For example, fertilizer prices are expected to spike because the Gulf region accounts for one-third of the global supply of nitrogen fertilizers. The timing could not be worse. Global food producers in the northern hemisphere are in the middle of planting season, with most fertilizers being applied between February and May. The price of animal feed, eggs, meat, corn, wheat, rice, and other major food items is expected to rise within the next 3-6 months. For African economies already heavily dependent on imported food, higher prices will create a second wave of inflation.

The burden will be even greater for Africa’s net oil importers, including Kenya, South Africa, and much of East Africa, where a substantial share of oil is sourced from the Middle East. Kenya, for example, entered into a government-to-government oil deal with Saudi Arabia two years ago; but every drop of fuel it imports through the Port of Mombasa comes through the Strait of Hormuz. Unless the situation de-escalates quickly, the price of Kenya’s fuel will spike, putting additional pressure on its foreign currency reserves, the exchange rate, external debt, public finances, and cost of living.

As if this familiar cycle were not bad enough, the disruption comes at a moment of political volatility. Kenya’s next general election is about a year away, and just two years ago, a cost-of-living crisis sparked protests that brought the country’s political system to the brink of collapse.

Yet Kenya’s potential to rely more on renewables and clean energy is immense, offering a future path that is far more promising than continued fossil-fuel dependence. Once solar, wind, and geothermal infrastructure is in place, energy can be produced at near-zero marginal cost. And because these energy sources cannot be sanctioned, blockaded, or priced in a foreign currency, they dramatically reduce exposure to exchange-rate volatility, import shocks, and geopolitical risk—the factors that regularly destabilize African economies.

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Every locally produced green kilowatt-hour saves African dollars that would have been borrowed to import fuel. Renewable energy is the only way that African economies can escape permanent dependence on imported fuels, foreign currencies, and external creditors. More than just a climate measure, it is the foundation for long-term economic sovereignty.

With large reserves of the critical minerals needed to drive the green industrial revolution globally, Africa is positioned to become an energy and economic powerhouse. Financial and industry analysts are no longer talking about fossil-fuel assets becoming stranded in 2040 or some other distant date; timelines have accelerated. Many assets are at risk of being stranded today, owing to geopolitical risk, insurance costs (or outright uninsurability), and currency constraints. The Persian Gulf crisis shows that the risk calculus can change overnight.

Indeed, there is growing recognition that the future of energy investment lies in systems that are resilient to climate risk and geopolitical shocks alike. Major African banks—including Standard Bank, Nedbank, and FirstRand—have already set strict 2026 limits on coal and oil exposure. Any investor embarking on a new fossil-fuel project may be walking into an “illiquidity trap,” because no one knows if there will be any buyers for such assets in five years.

Looking ahead, Africa’s pension funds should become the first line of defense for African clean-energy sovereignty. With around $1 trillion in assets under management, they can finance the domestic renewable-energy buildout, thus reducing import dependencies and enhancing macroeconomic stability.

The war in the Middle East is the ultimate stress test. Institutional investors must move beyond checking the ESG (environmental, social, and governance) boxes to recognizing that renewable energy is the only asset class capable of hedging against energy-price volatility in the 21st century. And for their part, African governments need to make the bold, strategic policy moves to support this shift in mindset.

Africa does not need a massive increase in fiscal space to begin this transition. Rather, it needs strategic policy coordination through regional and Pan-African industrial policies, the Africa Mining Vision, and the African Union’s Agenda 2063. This is the moment to work toward joint public procurement programs, local manufacturing of renewable components, an increased role for public development banks, and regulatory coordination to fast-track cross-border investments, manufacturing, deployment, and energy transmission.

Clean-energy sovereignty should not be viewed as a luxury. It is the prerequisite for stability, political independence, and long-term economic development across the continent.

© Project Syndicate