Trouble is brewing on the Nile. For years, use of the river was mainly about the needs of Egypt, by far the largest and most powerful riparian country in the basin. But since the Arab Spring of 2011, the situation has changed considerably. Egypt’s troubles over the last decade have weakened its ability to project power southward, while upper riparian states—Ethiopia in particular—have enjoyed a period of economic growth and relative stability, which has led them to look at the great river as an important national resource. Tensions have come to a head since Ethiopia announced the construction of the Grand Ethiopian Renaissance Dam (GERD), construction of which is now almost complete. Once full, the resulting reservoir will be larger than the whole of Greater London. Much of the water it holds would have previously reached Sudan and Egypt largely unhindered.

As the moment to start filling GERD’s vast new reservoir nears, these downstream neighbors have been unable to reach consensus with Ethiopia on its plans for the river. While still a remote possibility—and one that hopefully will never materialize—military confrontation is not completely out of the question. Indeed, it is often referred to by all parties as the worst-case alternative to a negotiated agreement. The need to reach a settlement is becoming more urgent by the hour.

It’s a classic negotiation problem in international water resource management. Ethiopia is building a vast hydroelectric facility on the upper Blue Nile, entirely within its own sovereign territory. With an installed capacity of over six gigawatts, the dam is the largest in Africa, and will produce enough power not only to support the industrialization of the country, but also to export electricity to neighbors, including Sudan. The sale of this energy will be a crucial source of foreign currency for a country whose own Ethiopian birr is not traded on international markets.

The problem is that the Blue Nile is also the principal tributary of the Nile, accounting for around 85 percent of the total flow that reaches Egypt. As the dam nears completion, the problem of filling the reservoir has come to the fore. During the period of filling, which will last several years, the Egyptians and Sudanese maintain that their supply of water will be severely impacted—unless an agreement is reached in which Ethiopia releases enough water to meet its neighbors’ needs, and agrees to not interfere indiscriminately with the flow, or even shut-off supplies completely, in the future.

Ethiopia argues that the hydroelectric plant will not be a significant consumer of water once the reservoir is filled. If anything, it suggests, Sudan will actually benefit from a more regulated flow. Egypt meanwhile has the Aswan High Dam, whose own enormous reservoir, Lake Nasser, can hold twice the Nile’s annual flow—more than enough to buffer any temporary reduction, according to the Ethiopians. Why should they cede control of their own waters to a country that has never shown any hesitation to exercise sovereignty over the entire river?

Cooperation is Key

A thorny situation, but one that is technically soluble. The impasse is more about geopolitics and trust than it is about engineering. The Nile Basin Initiative—the partnership between ten riparian countries launched in 1999—has made heroic efforts in trying to create a framework within which trust could be built. Ensuring that Egypt and Sudan have enough water, while also allowing Ethiopia and others to enjoy the benefits of the river, requires cooperation and the understanding that decisions that might benefit one party today will not set a precedent that jeopardises the others’ futures. Such cooperation may also require bearing politically difficult costs domestically—intervening in Egypt’s agricultural water subsidies, for example, or curtailing the speed at which Ethiopia’s GERD becomes fully operational and thus irritating the large number of Ethiopians whose savings have provided crucial finance to the massive project.

International coordination along the Nile is a long-festering issue. During that brief period in the early 20^th century when Britain controlled virtually all of the basin, from Lake Victoria to the Delta, engineers and bureaucrats imagined an integrated solution that would enable full management of the river, storage of water, and access to irrigation. After Egypt regained independence in 1922, the problem of sharing the Nile with Anglo-Sudan led to a 1929 agreement. Other riparian countries were excluded from the agreements, despite the fact that, from 1930 onwards, Haile Selassie’s Ethiopia in particular had become an ever more influential international stakeholder. The same happened with the next major agreement in 1959, leading Selassie to invite the U.S. Bureau of Reclamation to produce a blueprint for the Blue Nile, in a clear shot across the bows of her downstream neighbours. Nasser’s High Aswan Dam then established a large downstream demand for water in Egypt, reasserting the supremacy of that country’s permanent needs on the river, and seemingly marking the unilateral conclusion to its reconfiguration. Until now, that is.  

All these developments, whether implemented or merely threatened, were supported by the presence of a dominant underwriter—be it the British Empire, U.S. Department of State, the World Bank, or the Soviet Union. The mechanisms by which finance can be extended to its development has always been a critical factor in negotiations over the Nile. Crucially, this is not just about paying for the construction of individual projects—it is also the lubricant to enable the development of non-zero sum game solutions. Vaulting continents to Asia, the famed Indus Treaty between Indian and Pakistan is another case in point. Kashmir-permitting, it continues to function to this day as a testament to riparian international cooperation between uncomfortable neighbors. However, its origin was not only founded on well-meaning international cooperation. The treaty was brokered with significant financial commitment orchestrated by the World Bank, in order to pay for the replumbing of Pakistan and to separate intertwined irrigation networks.

Coordination is conditional on the domestic actions of all parties, the cost of which must be politically acceptable. Finance can contribute to making them so by both consolidating them in the delivery of needed infrastructure, and in ensuring that the actions can be spread over time. Therefore, a central question in the development of a negotiated solution amongst riparian states who share a river should be the financing of such a solution.

The Stakes are High

Cooperation isn’t only about financing large infrastructure, of course. Elsewhere, for example, The Nature Conservancy has been working with riparian countries on another great African river, the Okavango, to create a fund that would underwrite the protection of upstream resources and protect the ecologically irreplaceable Delta. The hope is that, by mobilizing additional concessional resources, it might be possible to reshape the incentives of riparian countries on the upper and lower reaches of the river, leading to a use of its waters that is better balanced between the needs of humans and nature. The stakes are high on the Okavango, too: unmitigated development of Angola’s water resources upstream could irrecoverably compromise the state of the Delta, one of the most important ecosystems on the planet and a crucial source of tourism income for Botswana.  

It’s vitally important to get this right. The situations on the Nile and Okavango are important harbingers of much more to come. Most countries in Africa are landlocked; many are also traversed by a shared river like the Congo, Zambezi, or Niger. Transboundary issues are going to become the norm rather than the exception across a continent which has only so far scratched the surface of its potential to generate hydropower and regulate the increasing variability of its tropical precipitation patterns.

The question is who will provide the underwriting to find better, more coordinated solutions at the scale necessary for the developmental and environmental challenges faced by these countries? At face value, China is the most obvious candidate—it has already extended significant loans to a number of African countries, especially Angola for the upper riparian of the Okavango, and Ethiopia for the upper riparian of the Nile.

So far, however, these interventions have been limited to investments and consultancy for individual pieces of infrastructure like GERD. Whether China will have appetite for underwriting the greater optimization of Africa’s great transboundary rivers—whether it will be willing to engage beyond engineering interests and play the role of influencer—is pure speculation at this point.

And so, the international community is left with a conundrum. Historical experience and current experiments, like those The Nature Conservancy is piloting, suggest that securing cooperation on critical water management issues requires defining terms in a way that is financeable, and having cash on the table to back it. Where those financial resources will come from is as of yet unclear, but there should be no illusion: if the riparian countries of the Nile fail to reach an agreement, the repercussions across the continent could well lead to ultimately turbulent waters on all of Africa’s major rivers.