Improved Cooperation Amongst the Blue Nile States and Its Impact on East African Development

From August 25th to 26th representatives from Egypt, The Republic of the Sudan, and Ethiopia met in Khartoum to discuss the development of Grand Ethiopian Renaissance Dam (GERD) and its potential impact on the flow of the Blue Nile. The meeting concluded with the announcement of an agreement to convene a team of experts to assess the dam’s impact and report its findings within six months. Thus far this summit has proven to be the most productive of recent meetings between these countries. Though Egypt has concerns about the dam’s construction (namely that the flow of the Nile will be reduced while the GERD's reservoir fills) it would appear that Cairo is resigned to the dam’s construction and is attempting to ensure that Egyptian concerns are taken into account in the management of the project. This cooperation could prove to be a positive step in the economic development of East Africa.

Prior to the Arab Spring Egypt's claim that it has a legal right to the majority of Nile’s water meant that the cooperation that we have seen in these meetings would have been unthinkable. Agreements reached in 1929 and 1959 between Egypt and the United Kingdom (representing their then East African Colonies) awarded the vast majority of the waters of the Nile to Egypt with a smaller portion reserved for Sudan. Ethiopia was not a party to the treaties despite the fact that the majority of the waters of the Nile originate in that country. Suffice it to say neither Ethiopia nor the other co-riparian countries willingly consented to these agreements but until recently there has been little that they could do about this arrangement as Egypt, though a poor country itself, was still much more powerful militarily and economically than its neighbors. The fact that many of these countries faced their own internal problems did not help the situation.

The internal instability that the Arab Spring has wrought in Egypt has weakened Cairo’s ability to bully its neighbors. One of the reasons that the military let then president Mohamed Morsi sack Field Marshal Tantawi in August of 2012 might have been the need to demonstrate to Egypt’s neighbors that their was a strong leader in Cairo. The idea may well have been that Tantawi's dismissal would send a message to parties, such as co-riparian countries that wanted more water, that Egypt could still protect its interests. Clearly, this tactic has not worked. Cairo now finds itself in a position where starting a conflict to prevent the development of GERD is too costly. Egypt appears to have accepted this reality and is now positioning itself so that Cairo can ensure that Egyptian interests are protected. On the surface statements such as “Egypt was never, and will never be against the development (of co-riparian countries)”...“as long as they are aiming to achieve mutual development,” (as well as) “the integrated management of water resources” might appear as rhetoric, however, the geopolitical realities of the region gives us reason to take such statements at face value.

The reality is that East African countries such as Ethiopia, Kenya, and Tanzania are developing quickly. We are seeing improvements in infrastructure that provide access to Central African minerals, the development of the region’s manufacturing capabilities, and significant investments in port facilities. These developments combined with a geographic location that allows for easy trade with East Asia, South Asia, and Europe bodes well for the region, however, regular access to electricity is key to ensuring this development. The GERD could help meet these energy needs. Hydrological cooperation in the region could help maximize water resources, improve food security, and ensure a more reliable energy supply while reducing the political risk that a conflict (be it formal e.g. military or informal e.g. chronic acts of sabotage) would inflict. Cooperation would allow the countries of East and Northeastern Africa to focus on putting their resources to productive purposes rather than trying to undermine one another. If the team of experts is able to do their job properly within the six month time frame we will know by the Spring of 2015 whether or not such cooperation is possible and what policies will need to be enacted to promote it as well as a having a better understanding of any potential agreement's impact on the economic development of East Africa.

The Shift of the Balance of Power in Northeastern Africa and Its Impact on Hydropolitical Cooperation in the Blue Nile States

On Monday November 4^th, 2013 representatives from The Republic of Sudan, Egypt and Ethiopia met in Khartoum to discuss the findings of a report by an International Panel of Experts concerning the development of the Grand Ethiopian Renaissance Dam. Though an agreement to form a supervisory committee for the dam failed it is important to note that this meeting would have been inconceivable three years ago, however, the Arab Spring and the secession of South Sudan have significantly changed the balance of power in Northeastern Africa. Cairo's consent to the meeting and Khartoum's support of the dam testifies to this shift. Though an agreement has not been reached, Egypt’s weakness and Sudan’s support of the dam indicates that a deal could become a reality provided that Cairo’s concerns are mollified. A more thorough examination of the dam's impact could go a long way to addressing these concerns paving the way for an agreement which would increase energy production and agricultural output while reducing political instability between the countries (Egypt’s domestic situation is an entirely different story).

Due to domestic instability Egypt has neither the strength to enforce its will on the Nile nor the resources to go to war, especially as most of its co-riparian countries have common hydropolitical grievances which could unite them. The Republic of Sudan is the only other country whose water rights Cairo formally recognizes. This has historically meant that Egypt and Sudan's interests usually aligned, however, in a recent about-face Khartoum is now in support of the dam. This change in policy is not surprising as the independence of South Sudan has reduced oil revenues for the Republic of Sudan making the revitalization of its agricultural sector an economic imperative. The dam will facilitate this shift. An increase in arable land is essential as Khartoum and Beijing have recently reached an Agricultural Cooperation Agreement.

The Grand Ethiopian Renaissance Dam is scheduled to be completed by 2017. When operational it will facilitate the irrigation of about 500,000ha of new agricultural lands in Sudan. The dam will be based on the Benishangul-Gumuz region of North Eastern Ethiopia, which is about 25 miles from the Sudanese border. This proximity will provide cheap energy to Sudan further helping the country develop. The fact that Ethiopia is paying the dam's projected cost of 4.7 billion USD is also a benefit for Sudan. Naturally, the dam will help Ethiopia meet its own developmental needs. Certainly, the country will benefit from the hydropower and increased agricultural yield. Recent deals with Djibouti, such as the Djibouti-Ethiopia railway line, are also reducing the land locked status that the independence of Eritrea has imposed on Ethiopia. This will help reduce the cost of Ethiopian exports.

Cairo now finds itself in a position where negotiating is preferable to aggression. Khartoum has an affordable way to reorient its economy. And Addis Ababa is in a position to attract investment and build up its economy. All of these changes reflect the regional power shift. Ideally, an increase in agricultural yields will allow the region to feed its growing population while exporting the surplus. That said, the terms and conditions of such deals should be monitored closely as the ideal and the actual do not always overlap. Overly exploitative deals could reduce the stability that an agreement on the dam could bring.

　

The Geopolitical Consequences Of The Grand Ethiopian Renaissance Dam

This article was originally posted on Seeking Alpha on Oct 23, 2012.

Background: The construction of the Grand Ethiopian Renaissance Dam on the Blue Nile will likely heighten tensions in East Africa and could also lead to an increase in instability in Southwest Asia. When Egypt became preoccupied with the Arab Spring at the beginning of 2011 the East African States of the Nile River Basin took the opportunity to vocalize their claims to the water resources of the Nile. The 1959 Nile Water Agreement, a colonial era treaty, awards the vast majority of the Nile's waters to Egypt. The co-riparian countries of the Nile have always been against this treaty as the agreement was signed by foreign powers and does not protect the interests of the states in question. Despite this resentment, Egypt's relative economic and military strength and the internal stability issues in some countries made it difficult for East African countries to challenge this treaty. The current situation in Egypt has changed this.

The Nile is divided into the Blue Nile and the White Nile. Ethiopia, North Sudan, South Sudan, Egypt and Eritrea (to a minor degree) all share the water of the Blue Nile with Ethiopia's highlands providing approximately 85% of the river's water supply. In 2010 Ethiopia, Kenya, Uganda, Rwanda and Tanzania increased their efforts to divide the water resources of the River Basin more equitably and revoke Egypt's right to approve any projects on the river, such as the construction of dams, that might impact the flow of the river. Not surprisingly both Cairo opposed these measures. Given that the population in the Nile River Basin is expanding dramatically (it is expected to double by 2050) water use is on the rise, thus any cut in access to the river's resources is perceived as an existential threat. In the realm of hydropolitics violent conflicts tend to occur internally. The Nile River Basin is one the region that could see violence on an international level. Given the geography the region this could impact ships coming through the Suez Canal and stability in Southwest Asia.

For the moment lets look at the challenges that Ethiopia faces in constructing the dam, the options that Egypt has to counter Addis Ababa's actions and the concerns of North and South Sudan.

Ethiopia's Challenges: Building a large dam is neither a cheap or fast proposition. The Grand Ethiopian Renaissance Dam is supposed to be complete by 2017. That said the question of how the estimated price tag for the project of 5 Billion USD is going to be met needs to be answered. Given that the World Bank calculated Ethiopia's 2011 GDP as $31.71 billion we are looking at a project that is roughly one sixth of the countries economic output. Ethiopia started building the dam before they had secured all the necessary funding as Addis Ababa knows that it likely only as a limited time before Egypt can counter the dam's construction. It is likely that one of Cairo's key objectives will be to ensure that Addis Ababa never raises the additional funding. In theory Ethiopia could offset the cost of the project through selling hydropower but it must be noted that a theoretical deal is not a done deal. Questions remain as to how much revenue Ethiopia would be able to gain from the sale. There are also concerns as to how long it will take the reservoir of the dam to fill. There is speculation that it could take several years which would likely reduce downstream flows. In short, the faster Ethiopia wants to raise the reservoir the more down stream flows are going to be cut. That said, this dam is in the highlands which means that less water in lost to evaporation as compared to the water in Lake Nasser so it is possible that damming in Ethiopia and deconstructing the Aswan High Dam (which is contributing to soil salinization in Egypt's fertile Nile Delta) could result in more water and increased food production in the region. Despite this scenario it is unlikely that either Cairo or Khartoum would consent to policy makers in upstream countries controlling their access to the flow of the Nile.

Egypt's Concerns: Approximately 99% of Egypt's 82.54 million people lives in the Nile River Valley in an area about the size of Maryland. This population is utterly dependent upon the Nile's waters. Despite the current instability in Egypt Cairo has several strategies that it can employ:

1. Egypt could use Pakistan as a model and turn a blind eye towards parties in the region whose interests go against those of the United States and other Western powers. Such an act would likely emboldened these groups. Given Egypt's strategic location it could be used as a staging ground to cause disruptions in North Africa and Southwest Asia. Such actions could also put further strains on Egyptian - Israeli relations which would be a further issue that the United States would have to manage. This would distract Washington from other pressing issues in other parts of the world. Though this strategy would strain relations between the United States and Egypt it is unlikely that the Washington would abandoned Cairo outright. Pakistan serves as a precedent here. For these reasons the Egyptians can essentially say, "Side with us in this dispute and we will not make your life more complicated." Such a strategy could be used to ensure that Ethiopia never receives the funds necessary to complete the dam.

2. Egypt could fund rebels and opposition groups in upriver states. A precedent exists here as Egypt supported both the Eritrean People's Liberation Front and Tigrayan People's Liberation Front during the 70's and 80's. Political tensions in Kenya, Uganda and Rwanda are also not exactly closely guarded secrets. Cairo might seek to exploit these divisions if its access to water is threatened. Egypt could also offer financial assistance to some of these countries in an effort to buy their support. The success of such a policy is questionable however given how firmly the upriver states have been pressing their claim to the Nile's water. Thus, it is unlikely that any of these countries would legally limit their access to the Nile's waters for any length of time let alone in perpetuity.

3. Egypt could disrupt shipping in the Suez Canal. This is the least likely scenario as it would have a major impact on the Egyptian economy. The decline in revenues from tourism would also make this approach even more economically damaging. That said access to water is literally a life or death issue. When confronted with such choices states make decisions that would, in other circumstances, be madness. Though this is the least likely scenario it is worth keeping in mind if Egypt gets desperate.

North Sudan's Concerns: Though relations between North and South Sudan have improved of late they are still strained. Khartoum will not want another challenging issue to contend with but, as in Egypt, access to water is an issue that is too big to put on the back burner. Given North Sudan's geographic location and the fact that it has a legal claim to the water resources of the Nile under the 1959 Nile Waters Agreement it tends to side with Egypt on these issues. Thus, it is likely that Khartoum will continue this trend and support Cairo's position.

South Sudan's Concerns: As the world's newest country South Sudan has a variety of concerns. Though water is one of them the country does enjoy enough rainfall to make its agricultural sector not totally dependent on irrigation. That said water is not a resource that one signs away lightly. After all South Sudan needs water for sanitation, irrigation could aid food security and the ability to impact the flow of the Nile into North Sudan and Egypt gives Juba some leverage. For these reasons is unlikely that South Sudan would sign any agreement which would limit their access to the Nile even if such a deal provided them with much needed capital.

Conclusion: Tensions in the Nile River Basin are not going to disappear anytime soon. For the reasons outlined above the region should be monitored as it could result in a humanitarian crisis either in the form of war, chronic food insecurity, inadequate sanitation or a combination of all of the above. Given the proximity of the Horn of Africa to Southwest Asia it is not impossible that instability in Africa could be exported and in turn could impact the regional interests of the United States and put pressure on Washington to intervene in conflicts that would be costly and probably not end in a conclusive manner. Given internal issues in Egypt it is unlikely that these problems will result in a conflict within the next six to twelve months but it is possible that the situation will escalate within the coming five years. An increase in stability in Egypt will have a direct effect on how forcefully Cairo challenges the actions of Ethiopia and the other upriver Nile States.

How Exchanging Water for Access to Oil Infrastructure in the Sudans Could Benefit the Nile River Basin

Update 9/6/13: This article was originally posted on Seeking Alpha on July 7^th, 2011. Though there have been tensions between North and South Sudan, full-scale hostilities have not recommenced. It is interesting to note China’s interest in the region. Though China has recently signed deals worth about $5 billion dollar in Kenya it has not provided any funding of significance to the $25.5 billion Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) plan. It appears that Beijing’s preference is the development of similar facilities in Bagamoyo, Tanzania. Though there are many possible causes for this approach it is likely that China does not want to damage relations with North Sudan. In terms of logistics it would be easy for South Sudan to ship its oil out of Lamu, Kenya. This would reduce Juba’s dependency on North Sudanese infrastructure. For this reason the development of LAPSSET goes against Khartoum’s interests. Beijing presumably recognizes that supporting the project would likely interfere with the economic and political relations between China and North Sudan.


On July 9^th South Sudan will become the world’s newest country. As oil provides the majority of Juba’s budget, the ability to sell it is essential to the country’s development. However, disputes between North Sudan and South Sudan over the division of oil revenues has caused Khartoum to publicly threaten to refuse Juba access to Northern Sudanese infrastructure, which is currently the most feasible means to get Southern Sudanese oil to the market. Despite this set back Juba has several important factors working in its advantage that could reduce the likelihood of inter state conflict:

• The other East African States have a vested interest in seeing South Sudan develop.
• Juba has the ability to reduce the supply of the White Nile’s water to North Sudan.
• Egypt, who would also be impacted, is going through a period of instability. This unrest   weakens Cairo’s capacity to prevent such an action.
• International agribusiness is buying up large swathes of the Nile River Basin to provide food for much more powerful countries complicating the distribution of water resources.

Clearly, all the countries in the region have a stake in ensuring that South Sudan develops. Effective diplomacy backed by guaranteed access to resources could result in a beneficial compromise rather than a war. Such an agreement would ideally lead to greater regional cooperation in managing the Nile which would ensure more water for all parties. Though violence is still a possibility and historical animosity in the region could derail negotiations, an agreement can still be reached if the aforementioned factors are addressed.
 

Culturally speaking, Southern Sudan is related to East African countries. Development in South Sudan could provide employment for the large pool of unemployed labor in East Africa. This group includes highly skilled professionals such as teachers and civil servants who lack opportunities at home. Therefore, countries such as Uganda and Kenya have an economic interest in seeing South Sudan thrive as remittances would benefit their economy while fewer unemployed people will reduce social instability. The challenge here is that this development needs to be funded by revenue from oil. Since South Sudan is currently dependent on North Sudanese pipelines Khartoum has the power to devastate the South Sudanese economy. Juba has the ability to counter this threat by reducing North Sudan’s water supply from the White Nile, which provides a significant portion of the Nile’s flow during the dry season. Usually, this option would not be feasible as such an action would impact Egypt’s water supply which is a threat to the country’s national security. As Egypt is far and away the most powerful country in the region and Cairo has threatened violence in the past if its access to water is impacted, Egyptian concerns are usually taken quite seriously. This reality has been weakened as the current domestic unrest has limited Cairo’s capacity to respond leading the upstream Nile States (Ethiopia, Eritrea, Kenya, Uganda, Burundi, Tanzania, Rwanda and the DRC) to challenge the 1929 and 1959 Nile Water Agreements. These treaties gave Egypt and Sudan the rights to the vast majority of the Nile’s water. Though there is no guarantee that Egyptian instability has led many of the upstream Nile Basin Counties to sign the Nile Cooperative Framework Agreement (CFA) which seeks to replace the Nile Water Agreements, the timing is suspect. This action could be perceived as an admission by East African states that they feel that Egypt is too weak to stop them from demanding more water.
 

The countries of the Nile River Basin are poor and many have problems ensuring that their populations are fed. Complicating this is the fact that agribusinesses from richer states like Saudi Arabia, South Korea and China are buying land in countries such as Ethiopia and South Sudan. Though the sale of this land provides much needed revenue it also diminishes food supplies for the local, rapidly growing, population of the region. Essentially, what is happening is that economic reality is forcing countries that can barely feed themselves to sell off their capacity to produce food to interests who are too powerful to easily doublecross. If these sales are to stop, countries such as South Sudan must develop to the point where such transactions are no longer necessary. For this reason Egypt and Sudan have an interest in allowing South Sudan to develop. Both of these countries, though poor, are far richer than their southern neighbors and, as they are in a very arid region, need to import a significant portion of their food. It is feasible that Egypt and North Sudan could strike a deal with South Sudan whereby they provide developmental assistance and access to their infrastructure in return for long term guaranteed supplies of food at subsidized prices. After all, water security is linked to food security which is a driving reason why Cairo and Khartoum are so intent on preserving their access to the Nile’s waters. If another country could grow food more effectively and sell it to Egypt and North Sudan at a guaranteed price this could go a long way to appeasing the two countries. Since North Sudan would be a direct beneficiary of such a deal, access to North Sudanese roads and Red Sea ports should be relatively easy to negotiate.
 

The Nile River Basin countries face numerous challenges. Formal peace between states does not equate true peace as inter-ethnic violence due to conflicting interests and historical animosity still is possible. The climate of the region means only certain areas have a sufficient amount of arable land. The populations are rising dramatically while standards of living are not. There is a strong probability that the Nuba in Kordofan could face persecution comparable to Darfur. And, social factors can lead nations to act in a manner contrary to their rational political and economic interests. Despite these challenges, finding a deal which guarantees Juba the right to use Northern Sudanese infrastructure in return for food supplies for North Sudan and Egypt could benefit everyone. South Sudan could develop without being sabotaged by its northern neighbors. Egypt and North Sudan’s food concerns would be addressed. And, the East African States would benefit by securing employment for their large pool of unemployed labor and collecting remittances. Such a deal will be difficult to negotiate but when all parties have interests that can be met, an agreement can be reached. After all, a war is far more costly.