EGYPT’S THRUST FOR WATER: Opportunity for Collaboration with Neighbors.

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When I began reading an article on bikya.news.com that was written by Aswat Masrlya entitled “Egypt to form National Council for Water Security,” I wondered what effect would Ethiopia building the Grand Renaissance Dam have on the Nile River’s downstream users such as Sudan and Egypt. Well, it appears that Egypt thinks that it will have a huge economic effect on its agribusiness which may threaten the peace and security in the Region.

According to Jeffrey Fleishman of the Los Angeles Times, Egypt gets 95% of its water from the Blue Nile, which is one of two major tributaries of the Nile River. The Other major tributary is the White River which originates in Uganda. He also reiterated that Egypt is concerned that the diversion of that water will affect the flow of the Nile River water to Egypt, which it disparately needs to sustain itself.  According to both articles, the Dam is 20% complete and is expected to cost $4.2 billion to complete.  Ethiopia states that  it needs that Dam to help it generate the necessary hydropower to grow its economy.

What I find fascinating about this dispute is something written by Mohammed Awad on bikya.news.com, he wrote that both countries are members of the Nile Basin Initiative (NBI) whose mission is “to achieve sustainable socio-economic development through equitable utilization of, and benefit from, the common Nile Basin Water resources,” but as Mr. Fleishman wrote in his article what may complicate that mission is what an Egyptian official was overheard stating,that it may coordinate with Ethiopian Rebels to keep that Dam from being built or use its intelligence service to blow it up.

According to a May 14, 2010 BBC News article entitled “East Africa Seeks More Nile Water From Egypt,” Kenya’s director of water resources, John Nyaro, was said to have made the following comment: “where there is no rule of law, the rule of the jungle does not provide peace.” Let’s hope that the dispute regarding the apportionment of the water from the Nile River as prescribed by Nile Water Treaty can be amicably resolved without resorting to the rule of the jungle as the NBI is supposed to strive for the “equitable utilization” of the Nile water resources. The NBI which was signed by Egypt and Sudan in 1959 allocated the following apportionment of water to the following countries: 66% to Egypt and 22% to Sudan with the rest being allocated to Ethiopia notwithstanding the fact as reported in a BBC News article on May 14, 2010  that 85% of the Nile’s water originates in Ethiopia from the Blue Nile tributary.

The articles cited to in this post reiterated Ethiopia’s position regarding the building of the  Grand Renaissance Dam, which was that the water diverted from the Blue Nile River will be used to create hydroelectricity to spur development in that country and that it will not impede or effect the flow of water to Egypt from the Nile River, but as Sub-Saharan countries continue to attract more and more investors seeking to participate in the anticipated growth of those countries, the need for more power is a natural result of that phenomenal which can be shared with Egypt and other African States. The sharing/selling of  that hydroelectric power can spur economic development and ultimately urbanization in all potentially affect States, which should be good for that region.

The World Bank issued an interesting press release on December 13, 2012 Entitled “Ethiopia Economic Update – Overcoming Inflation, Raising Competitiveness,” which echoed the challenges this frontier economy has yet to overcome and noted those that it had overcame. I highly recommend it, it’s a good read. Finally, as Ethiopia’s economy grows from a frontier market to an emerging market and hopefully to a mature developed market, maybe both Countries can use this period of transition to foster each other’s economic development by swapping  oil for hydropower. You may recall that Venezuela, who didn’t have many States friendly with it used its massive oil reserves to trade for resources that it lacked in its own country for the better of itself  which further the States that it had a trading relation with grow too. If not oil, then Egypt could possibly offer agriculture to foster goodwill and trade in an effort to calm tension in that Region, especially in light of the fact that it’s agribusiness is depended on the water resources from the Nile River.

Allen Thomas

First Posted on June 9, 2013, via Twitter: @justdmarkets