How coal can save SMEs amid surging fuel prices, by experts
Coal is re-emerging as a critical lifeline for African small and medium-sized enterprises (SMEs) struggling to stay afloat amid surging fuel prices and volatile global oil markets, experts have said.
- By Daniel Essiet
Coal is re-emerging as a critical lifeline for African small and medium-sized enterprises (SMEs) struggling to stay afloat amid surging fuel prices and volatile global oil markets, experts have said.
The renewed interest in coal comes as geopolitical tensions continue to unsettle energy markets. In March 2026, Brent crude prices climbed above $100 per barrel, swinging sharply from $81 on March 3 to a peak of $112 on March 12 before easing to $98 by March 25. For many African economies dependent on diesel-powered generation, the fluctuations have translated directly into rising operating costs and deepening uncertainty.
SMEs, already operating on tight margins, are among the hardest hit. In countries where grid electricity remains unreliable, businesses rely heavily on diesel generators, leaving them exposed to fuel price shocks. In Nigeria, diesel prices have surged past N1,000 per litre—an increase of nearly 40 percent within weeks. Similar pressures are being felt elsewhere, with Zimbabwe recording diesel prices above $2.18 per litre, while Botswana and Uganda grapple with persistent volatility.
The situation has been exacerbated by global supply disruptions, particularly around the Strait of Hormuz, a key route for oil shipments. Even in South Africa, where energy infrastructure is relatively more developed, businesses have increasingly turned to diesel due to ongoing grid instability and load shedding.
Read Also: Media key to Nigeria’s 2028 mandatory ESG reporting drive, says firm
Against this backdrop, energy experts are advocating for a strategic pivot toward coal as a domestic and more predictable energy source. Africa holds vast coal reserves, including an estimated 9.8 billion tons in Nigeria, 502 million tons in Zimbabwe, 1.6 billion tons in Botswana, and 800 million tons in Uganda. Harnessing these resources, they argue, could reduce dependence on imported fuels, ease pressure on foreign exchange, and provide SMEs with more stable energy costs.
According to Executive Chairman of the African Energy Chamber, NJ Ayuk, the shift is both practical and necessary. “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,” he said.
While coal’s resurgence is gaining traction, it remains a contentious issue within the broader context of global decarbonization efforts. Critics warn of its environmental impact, but proponents insist that Africa must balance climate goals with urgent development needs such as energy access, industrial growth, and economic resilience.
This debate is expected to take center stage at African Energy Week 2026, where policymakers, investors, and industry leaders will examine coal’s role in Africa’s evolving energy mix. Discussions will focus on financing mechanisms, cleaner coal technologies, and how coal can support sectors that require consistent and affordable power.
