Egypt and Ethiopia Resume Their Nile Rivalry

(Bloomberg Opinion) -- A dispute in the Nile Basin that had looked well on its way to a satisfactory resolution has once again flared into a crisis. And with international attention distracted by the coronavirus epidemic, chances are that it will get worse.

Talks between Ethiopia, Egypt and Sudan over the Grand Ethiopian Renaissance Dam, hosted by the U.S. Department of the Treasury, had initially showed some promise. In January, the parties issued a joint statement saying they had agreed on a schedule for filling the dam’s reservoir.

The “fill schedule” has been the biggest bone of contention between the parties. Ethiopia had wanted to fill the dam within three years, allowing it to generate power for domestic consumption and export. Since the filling of the dam will reduce flows downstream, Cairo wants the process extended to as long as 15 years, to minimize the reduction in flow to Egypt during the fill.

With American mediation, it looked like a middle ground could be found, and U.S. Secretary of the Treasury Steven Mnuchin indicated a final agreement on all outstanding issues was imminent.

But Ethiopia skipped the latest round of talks in Washington last month, and has entered into a war of words with both the U.S. and Egypt. The Ethiopians say they can proceed with the filling of the reservoir without an agreement. Mnuchin has warned Addis Ababa against doing so until an agreement had been signed. In response, Foreign Minister Gedu Andargachew has condemned Mnuchin’s statement as “undiplomatic.”

For its part, Cairo has said it would use “all available means” to defend the interests of its people. Ethiopia’s leading officers have warned they would “retaliate if there were any attacks on the dam.”

The details of the American proposal remain undisclosed, but some reports indicate Egypt felt under pressure to make more concessions than it had hoped. Since U.S. mediation was their idea, the Egyptians found it harder to refuse. Leaked reports suggest there is disagreement over how much water will flow through the dam, with Ethiopia wanting to limit the flow to 31 billion cubic meters annually and Egypt requesting a minimum of 40 bcm. The normal flow, when the Blue Nile is unobstructed, is 49 bcm; the U.S. proposal is believed to include a compromise of 37 bcm.

The renewed disagreement between the negotiating parties comes as the mediator’s attention is distracted. Just two weeks ago, President Donald Trump pledged to Egyptian President Abdel Fattah El Sisi that the U.S. would keep up its “tireless” efforts to broker an agreement. But Treasury now has its hands full with combating the effects of the epidemic, and may not have the bandwidth to resolve the GERD dispute.

The fear in Cairo is that Ethiopia will see this as an opportunity to resume its strategy of creating facts on the ground, and eventually to impose its preferred outcome on the downstream countries, Egypt and Sudan. If Ethiopia no longer feels bound to resolve the dispute before filling the reservoir and operating the dam, Egypt will feel pressure to take action to defend what it sees as a threat to its vital interests.

At its core, the problem for Ethiopia is one of opportunity costs and national pride. The longer a fill takes, the longer Ethiopia must wait to begin to reap the benefits anticipated from power generation. As officials in Addis Ababa point out, 70% of Ethiopians currently live without electricity, and the country desperately needs the revenues that would come from power exports.

As for Egypt, it has a fixed and increasingly stretched supply of water to sustain a rapidly growing population. Cairo also worries that if Ethiopia is allowed to do as it pleases with the Nile waters, other upstream Nile Basin countries might feel entitled to do likewise, disrupting and reducing the flow to Egypt.

There is an offramp to resolve this dispute and address the interests and concerns of both parties: Egypt, with the help of its international partners, should offer Ethiopia financial incentives to slow down its fill schedule. This would both offset Ethiopia’s opportunity costs and allow Egypt time to improve its consumption practices at home.

Researchers at the German Institute for International and Security Affairs have floated a proposal in which the European Union would help to determine a price tag for a slower fill and help Egypt with financing to pay Ethiopia to cover that cost. The plan requires Cairo to make firm commitments to improving its water management, which involves both better governance and less wasteful spending.

A resolution along these lines is urgently required, or the advances made under American mediation will be irretrievably lost.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Timothy Kaldas is an independent risk adviser and nonresident fellow at the Tahrir Institute for Middle East Policy.

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