Africa continues to face significant implications from the ongoing Gulf war, with Brent prices fluctuating from $81 per barrel on March 3 to $112 on March 12 and back down to $98 on March 25. But escalating crude prices bring challenges beyond imports, with African economies which rely heavily on diesel-fired power generation now faced with both unreliable supplies and heightened fuel costs. This challenge is most felt by small to medium-sized enterprises (SME), which now face a punishing rise in power costs at a time when margins are already under pressure.

In this environment, coal-fired power generation deserves renewed attention. With reserves estimated in the hundreds of billions of tons, Africa’s coal market stands to offer the fiscal relief many African SMEs require. As geopolitical tensions continue to mount across the Gulf and prices face even greater fluctuation in the near-term, the question is no longer whether coal-fired power generation is politically fashionable, but how African economies can utilize the resource to stabilize power costs, preserve foreign exchange and support business continuity.

Escalating Fuel Prices Pose Significant Challenge for African SMEs

Prices at the pump have escalated in recent weeks, leaving diesel-reliant businesses faced with even greater fiscal pressure. This comes as diesel generation has become a default for many SMEs operating across Africa, owing to unreliable grid infrastructure. Even the continent’s biggest economy South Africa has seen businesses move to diesel as constrained grid capacity and loadshedding impacts power access. Supply disruption at the Strait of Hormuz and escalating crude prices have placed further strain on the fuels so many African SMEs rely on.  

Nigerian fuel prices have reached upwards of ₦1,000 per liter in March 2026, due to price hikes by the Dangote Refinery and fluctuations in international markets. This represents a 39.5% increase since February, the second highest increase globally. Zimbabwean fuel prices have surged to record highs, with diesel averaging $2.18 per liter and petrol also exceeding $2 per liter. The country currently features the highest fuel prices across all SADC nations. Botswana also faces potential fuel price increases, while Ugandan fuel prices continue to experience volatility, with prices varying by location and supplier.

Why Coal Matters for SME Competitiveness

Coal offers the lifeline so many African SMEs need. Countries such as Nigeria, Zimbabwe, Botswana and Uganda all possess significant coal reserves and the shift to coal-fired power generation can not only help reduce the dependence on imported fuels but create a more predictable electricity cost structure for local businesses. Nigeria holds 9.8 billion cubic meters (bcm) of coal reserves, Zimbabwe is home to 502 million cubic meters (mcm), Botswana has 1.6 bcm and Uganda possesses 800 mcm.

For African SMEs, affordable and reliable electricity is often the difference between expansion and stagnation. Coal-fired power can offer a lower-cost alternative that supports manufacturing and commercial growth. It also opens the door to more bankable long-term planning, while offering stability during times of global supply shocks. With many African countries already integrating coal within their broader energy systems, scaling up generation and distribution could directly impact sovereign resilience. 

“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,” states NJ Ayuk, Executive Chairman, African Energy Chamber.

AEW 2026 Puts Coal Back into the Conversation

This is precisely why African Energy Week (AEW): Invest in African Energies 2026 remains such an important platform. Over the past several years, the event has hosted discussions around coal, including the application of clean coal technologies and the role of coal in broader power generation strategies. At a time when energy security, industrialization and affordability are moving back to the center of policymaking, those conversations are becoming more urgent.

Rather than approaching coal through an ideological lens, AEW 2026 provides a venue to examine where and how it can fit into Africa’s power mix in practical terms. That includes discussions around cleaner technologies, efficiency gains, financing models and the role coal can play in supporting productive sectors that cannot function on intermittent or high-cost power alone. AEW 2026 returns to Cape Town from October 12-16, 2026.