Africa’s Natural Gas Boom: Catalyst for Growth or Infrastructure Paradox?

Gerik

Summary:

Natural gas is becoming a cornerstone of Africa’s future energy mix, with rising domestic demand and export potential fueling a production boom, particularly in sub-Saharan Africa...

Sub-Saharan Africa Emerges as the Next Growth Engine

According to the State of African Energy 2026 report by the African Energy Chamber, demand for natural gas in Africa is expected to rise by 60% by 2050. Although North Africa currently dominates with two-thirds of the continent’s production led by Algeria, Egypt, and Libya its share is projected to decline below 40% by 2035. In contrast, sub-Saharan Africa, which holds over 70% of the continent’s undeveloped reserves, is poised to lead future growth.

Countries such as Nigeria, Mozambique, Tanzania, Senegal, Mauritania, and Angola are accelerating development. Nigeria, having declared the “Decade of Gas” in 2021, leads commercial gas production in the region. New export projects, including Coral Sul (Mozambique), Greater Tortue (Senegal-Mauritania), and Congo LNG, have already expanded the continent’s export portfolio since 2022.

Export Strategy and Domestic Value Creation

Africa exported 34.7 million tonnes of LNG in 2024, with sub-Saharan countries contributing 26.9 million tonnes 60% to Asia and 25% to Europe. The report projects that sub-Saharan LNG supply could quadruple by 2050, especially with Tanzania entering the export market. The region’s proximity to both Atlantic and Indian Ocean markets positions it well to capitalize on spot price volatility and supply disruptions globally.

Crucially, many LNG export projects include Domestic Market Obligations (DMOs), requiring a portion of output to be allocated to local markets. This model allows rising exports to also boost domestic supply. Senegal, for instance, is targeting 3 GW of gas-powered electricity by 2050, leveraging DMO-supplied gas from its offshore LNG projects.

Domestically, natural gas is expected to support transportation, industrialization, and electricity generation. While only a few sub-Saharan countries currently have significant gas-fired power capacities, figures are steadily increasing. Nigeria leads with 12.6 GW, followed by Ghana (2.9 GW) and Mozambique (1.1 GW), while others like Tanzania, Senegal, and Côte d’Ivoire are also developing small-scale gas power facilities. Floating gas-fired plants are being deployed to meet coastal energy needs efficiently.

Economic Benefits and the Push for Industrial Diversification

The dual benefits of rising gas exports and increased domestic utilization could significantly transform sub-Saharan economies. Countries like Nigeria and Angola are using gas to reduce reliance on imported chemicals, fertilizers, and refined petroleum products. Angola’s new gas master plan aims to replace such imports with local production, while Nigeria’s National Gas Expansion Programme (NGEP) promotes compressed natural gas (CNG) for vehicles, launched in 2022.

Gas is also seen as a driver of industrial job creation. With growing interest in using gas for petrochemicals, metallurgy, and fertilizer production, the sector’s potential to stimulate employment and economic diversification is substantial. The emerging model emphasizes a “double dividend” boosting national revenue through exports while expanding energy access and industrial capacity at home.

Barriers to Realizing Africa’s Gas Potential

Despite abundant resources over 400 trillion cubic feet of recoverable gas Africa remains underdeveloped in terms of gas production. Most discoveries have not yet entered commercial production. Major reserves in the Rovuma Basin (Mozambique/Tanzania) and the Niger Delta (Nigeria) remain largely untapped, placing Africa second globally after Russia in undeveloped gas assets.

The 2026 Outlook report identifies four core challenges:

Upstream Economics: Over half of current sub-Saharan production comes from associated gas, which is cheaper to extract. However, non-associated (dry) gas, though independent of oil prices and extraction cycles, requires competitive pricing (in $/MMBtu) to attract investment.

Market Access and Demand Certainty: To ensure steady offtake and price visibility, countries need long-term contracts with reliable buyers, transparent pricing models, and government-backed demand incentives to encourage both producers and consumers.

Infrastructure and Midstream Gaps: Many potential producers lack the pipeline, liquefaction, and distribution systems necessary to move gas efficiently from source to market. Without midstream integration, upstream production stalls.

Country Risk and Regulatory Stability: Attracting investment requires stable fiscal terms, fair taxation, and a regulatory framework that balances national revenue goals with investor returns. Political risk remains a key concern. Clear and reasonable DMO frameworks and localization requirements are critical for long-term viability.

Failure to address these interconnected factors has previously led international oil companies to abandon even high-potential gas discoveries.

Strategic Advantage in a Global LNG Glut

Interestingly, the global LNG market is currently in a phase of oversupply, which some African producers see as an opportunity rather than a threat. The African Energy Chamber views gas as a "transition fuel" cleaner than coal or oil, ideal for power generation and industrial heat applications, and increasingly affordable as global prices decline.

This positioning allows sub-Saharan producers to scale up flexible gas projects suited to floating storage and regasification units (FSRUs), modular power plants, and domestic industrial hubs. The “infrastructure-demand paradox” where infrastructure lags behind potential demand can be solved with clear pricing, long-term contracts, and coordinated national policy.

Africa’s gas sector is at a critical turning point. With rising demand, vast reserves, and favorable export geography, especially in sub-Saharan countries, natural gas offers a rare chance to boost exports and strengthen domestic economies simultaneously. However, to unlock this potential, African governments must coordinate upstream incentives, midstream infrastructure, and downstream market access within a politically stable and investor-friendly environment. If successful, the continent could become a global energy player and power its own development trajectory for decades to come.

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