The World Bank has called on governments around the world to accelerate investments in renewable energy, clean technologies and resilient infrastructure, warning that rising pressures in global oil markets could undermine economic stability and long-term development.
The institution said continued volatility in oil prices underscores the urgent need for countries—particularly developing economies—to reduce dependence on fossil fuels and diversify their energy sources.
It noted that investments in solar power, decentralised energy systems and other clean technologies are increasingly critical to shielding economies from future energy shocks, while also supporting growth, job creation and climate resilience.
The World Bank also said energy security can be strengthened through a broader energy mix that includes renewable energy and nuclear power. According to the institution, diversification helps reduce exposure to sudden price swings and supply disruptions in global fuel markets.
To support the transition, it urged governments to prioritise critical energy infrastructure, including solar mini-grids, decentralised electricity systems and reliable national grids, particularly in remote, underserved and climate-vulnerable communities.
Beyond energy, the Bank stressed the importance of sustained investment in human capital. It said education systems and workforce development programmes must be modernised to prepare workers for emerging sectors such as clean technology, digital services and artificial intelligence.
The institution highlighted the growing use of AI in improving productivity, noting that farmers in some countries are already using AI-powered tools to detect crop and livestock diseases, enhance decision-making and improve access to services.
It further emphasized that human capital investment goes beyond technical skills, urging governments to strengthen healthcare, education and social protection systems to boost productivity and economic resilience.
The World Bank warned that the global economy is facing heightened uncertainty driven by geopolitical tensions, climate risks, policy instability and rapid technological change. It added that higher oil prices and tightening supply conditions are increasing pressure on public finances, especially in developing economies already struggling with inflation and fiscal deficits.
Despite these challenges, the Bank cautioned against cutting public investment during periods of economic stress, saying such moves weaken recovery, reduce productivity and limit long-term growth potential.
Instead, it recommended that governments focus on high-impact investments that create jobs, improve productivity and strengthen energy and climate resilience, while eliminating inefficient projects that offer limited economic returns.
The Bank also urged improvements in public sector efficiency, noting that nearly one-third of public investment spending is lost globally due to inefficiencies, with even higher losses in low-income countries.
It called for stronger project appraisal systems, improved procurement transparency, better implementation capacity and increased investment in infrastructure maintenance, warning that neglecting maintenance raises long-term costs and accelerates infrastructure deterioration.
The institution also pointed to the role of digital tools in improving accountability and project monitoring, citing countries such as Viet Nam and Cambodia, where governments use technology to track public investment outcomes.
As part of ongoing efforts, the World Bank said it is supporting countries including the Philippines, Viet Nam and Mongolia to strengthen investment planning and project appraisal systems to ensure projects deliver sustainable growth, job creation and long-term resilience.
The Bank concluded that while global economic shocks are likely to persist, countries that invest in clean energy, efficient public spending and human capital development will be better positioned to achieve sustainable growth, energy security and economic stability.
Discover more from Energy News Africa
Subscribe to get the latest posts sent to your email.