Africa must urgently scale up its grid-connected power generation by at least 16 gigawatts (GW) every year until 2050 to meet even its most basic energy needs, according to the State of Africa’s Infrastructure Report 2025 released by the Africa Finance Corporation (AFC).

The report paints a stark picture of the continent’s energy gap, warning that without aggressive and sustained investment in both generation and transmission, Africa’s industrial ambitions will remain elusive.

“To meet such transmission needs, Africa will require at least $3.2–4.3 billion annually through 2040,” the report said, adding that generation must increase by 16GW every year through 2050 just to lift the continent’s average capacity to 0.300 megawatts per thousand people—on par with levels currently seen in India and Indonesia.

This target is significantly beyond Africa’s current pace. Most African countries still rely on underfunded, outdated infrastructure that frequently collapses under pressure. While the AFC acknowledges the severity of the crisis, it also framed the moment as a vast investment opportunity across solar PV, gas-to-power, hydropower, battery storage, and grid modernization. With bold reforms and targeted capital inflows, the Corporation believes Africa can build the most dynamic and future-ready energy system in the world.

A Grim Benchmark: Nigeria As An Example

Africa’s energy struggle is perhaps best embodied by Nigeria, the continent’s most populous nation and its largest economy. The country currently generates around 5,000 megawatts (MW) of electricity on average, according to government data—an abysmally low figure for a nation of over 200 million people. Energy experts and government agencies have consistently said Nigeria needs at least 30,000MW to deliver a stable electricity supply nationwide. That target is six times more than current output, yet successive administrations have failed to close the gap meaningfully.

The AFC report places Nigeria at the heart of the continental push to increase generation and transmission capacity. Without decisive action by Nigeria, the rest of Africa could fall behind as well. The absence of a clear-cut strategy to meet the 16GW-per-year benchmark raises serious concerns about the continent’s long-term industrialization prospects.

In November 2024, the Nigerian government acknowledged that it would require at least $10 billion in private investment over the next 5–10 years to stabilize the power supply and transition towards reliable electricity for homes and industries. Yet despite multiple roadmaps and initiatives, there is still no cohesive national plan detailing how this will be achieved.

Private Capital, Reforms Key to Reversing Trend

The AFC emphasized that lessons from countries like Brazil, which opened its transmission sector to private investment in the 1990s, could guide Africa’s way forward. Brazil’s transmission infrastructure grew from 105,000 kilometers in 2012 to 184,000 kilometers by 2023. Just in 2024, the country’s first transmission tender attracted $3.65 billion—matching Africa’s entire annual requirement for grid investment.

“Brazil’s experience demonstrates that creating a viable investment pipeline—anchored in regulatory reform, unbundled utilities, and long-term planning—is essential to crowd in private capital at scale,” the AFC stated.

Nigeria, which has begun unbundling its power sector through the privatization of generation and distribution companies, has yet to fully unlock private sector potential in transmission—a key bottleneck in the country’s electricity chain. Power frequently fails not because there is no generation, but because there is no capacity to wheel it to end users.

The Nigerian government has pointed to progress under the Mission 300 initiative, a joint program by the World Bank and African Development Bank (AfDB) aimed at connecting 300 million Africans to electricity by 2030. In April 2025, Power Minister Adebayo Adelabu claimed that around 150 million Nigerians now have some form of electricity access, though 80 million still lack reliable supply.

However, experts have noted that expanding access without increasing generation and improving grid stability only spreads out scarcity. Most Nigerians still rely on expensive diesel or solar alternatives to meet basic energy needs. For industries, the reliance on private generation inflates production costs, stifles competitiveness, and limits job creation.

A Far Cry From Industrialization

The gap between Africa’s current energy landscape and its projected needs underscores a deeper challenge: industrialization. Without stable electricity, Africa’s ambitions to become a global manufacturing hub or a digitally-driven economy remain theoretical.

The failure to bridge the 16GW-per-year gap is expected to keep countries like Nigeria locked in energy poverty—where lights flicker in homes, businesses rely on noisy generators, and entire sectors remain underpowered.

Energy experts believe that unless Nigeria and other key African economies act quickly to attract capital, reform regulations, and build resilient infrastructure, the continent’s energy story will remain one of lost potential and deferred development.

The global auto industry is inching toward a production crisis as China’s export restrictions on rare earth minerals and magnets begin to bite, halting some manufacturing lines in Europe and prompting dire warnings from US automakers.

The restrictions, in place since early April, require companies to obtain a license to export key materials used in electric vehicles and other critical technologies. But only about 25 percent of license requests have been approved, according to Nikkei, with others held up in bureaucratic limbo as tensions between Washington and Beijing deepen.

Auto parts suppliers across Europe have already started shutting down operations due to the shortage of rare earth components, according to the European Association of Automotive Suppliers (CLEPA).

“With a deeply intertwined global supply chain, China’s export restrictions are already shutting down production in Europe’s supplier sector,” said Benjamin Krieger, CLEPA’s secretary general. “We urgently call on both the EU and Chinese authorities to engage in a constructive dialogue to ensure the licensing process is transparent, proportionate, and aligned with international norms.”

In the United States, executives in the auto sector are warning that production cuts could follow within weeks unless supplies resume. Rare earth magnets are essential to electric and hybrid motors but are also found in traditional components like catalytic converters and electronic seats. Their absence could stall not just EV output, but wide swaths of conventional car production as well.

The export restrictions are part of China’s tit-for-tat response to US tariffs introduced by President Donald Trump. While many of those tariffs have been temporarily paused, China has not reversed its curbs on rare earth exports. That decision has made rare earth minerals a central lever in trade negotiations, and many analysts believe it gives Beijing the upper hand. China controls more than 90 percent of the global rare earth supply chain, leaving Western industries deeply exposed.

Trump on Thursday revealed that he had held his first direct conversation with Chinese President Xi Jinping since returning to the White House in January, describing the call as “very positive.” In a post on his social media platform, Trump said the hour-and-a-half-long discussion had led to a breakthrough, with both sides agreeing to hold trade talks aimed at resolving the standoff over tariffs and the supply of rare earths.

“Our respective teams will be meeting shortly at a location to be determined,” Trump wrote.

The US delegation will include Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer.

Trump also disclosed that Xi “graciously” invited him and First Lady Melania Trump to China and that he had extended a reciprocal invitation for the Chinese leader to visit the United States. While no formal meetings have been scheduled, expectations are building that rare earth access will be front and center in the upcoming talks.

In the meantime, manufacturers are bracing for worsening conditions. The New York Times reported this week that even Chinese magnet producers have begun pausing operations due to the licensing bottleneck, raising concerns of deeper shortages in the months ahead.

Beyond the auto sector, the restrictions threaten to disrupt industries from consumer electronics to defense systems. But carmakers — particularly those dependent on electric vehicle production — remain the most exposed, especially as they navigate the broader fallout of shifting trade policies under Trump’s renewed administration.

With negotiations pending, automakers on both sides of the Atlantic are in a holding pattern, anxiously awaiting any signal that rare earth shipments might resume.