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The Global Economic Doctor
Scott B. MacDonald, Ph.D.
July 16, 2020

The Global Economic Doctor

Death on the Nile?

Death on the Nile?

Summary: The Grand Ethiopian Renaissance Dam (GERD), which began construction in 2011, is nearing completion, including the filling of a reservoir necessary to provide water flow for an electric power project. This development provides Ethiopia major leverage over the countries downriver and could boost Addis Ababa’s power throughout Africa, something that external forces, like China, the United States, Saudi Arabia and Turkey are aware. The GERD also raises the delicate long-term issue of food security for Egypt and Sudan, two countries with large and growing populations which have long histories of drought, famine and flooding. Egypt regards the reservoir as threatening a reduced water flow at their end of the river, which constitutes a national security problem. Supporting Egypt is Sudan, which is where the Blue and White Niles converge and continue their voyage to the river’s delta in the Mediterranean Sea. Diplomacy thus far has failed to resolve the issue. But no mistake should be made; the completion of the GERD and its reservoir is a game changer for Africa and is likely to have long-term consequences for the region’s geopolitical and economic landscape.

The Nile River is the longest river in Africa, possibly the world. In Egypt, it plays an important role in providing water to drink and to irrigate crops, as well as for transportation. This is critical considering that agriculture accounts for 14 percent of Egypt’s GDP. Agriculture remains the largest employer (over 31.2 percent of the total population) — and, it consumes 80 percent of all freshwater. Indeed, Egypt’s identity is closely entwined with the river; around 97 percent of the population lives on 4 percent of Egypt’s total land area in the Nile Valley and Delta. The concern in Cairo is that any radical reduction of water flow could have major socio-economic consequences, especially during a period when the country is grappling with the ill-effects of COVID-19 and a global economic slowdown (which has hurt tourism, another key sector).

The GERD must also be considered in the context of Egypt’s environmental fragility. According to the World Bank, Egypt is one of the most vulnerable countries to climate change. As the multilateral development bank observed: “Egypt’s Nile Delta and its coastal front on the Mediterranean are considered vulnerable to shoreline changes due to erosion and accretion, subsidence and sea level rise due to climate change. Heavy rains often result in flash floods in Egypt.” The Egyptian government’s concern is that the Nile Delta is already struggling with a rising sea level; what happens if the flow of water in the Nile declines? Does the penetration of sea water into key agricultural land accelerate?

While in a historical sense it has been said that Egypt was the daughter of the Nile and that Sudan was her handmaid, the latter country is not a mere aqueduct between the uplands where the Blue and White Niles originate and the Egyptian border. With 46 million people, Sudan is an important riparian proprietor. It needs a steady flow of water, considering its struggle to overhaul its economy and restore a degree of political stability. The country has experienced protracted social conflict, civil war, and, in July 2011, the loss of three-quarters of its oil production due to the secession of South Sudan. The oil sector had driven much of Sudan’s GDP growth since 1999. Without the oil sector, Sudan has been seeking to develop or improve other sectors, including agriculture.

Although it is less dependent on the Nile than Egypt, Sudan still needs the river as a source of water and transport. This is especially the case considering that Sudan is also regarded as one of the countries most vulnerable to climate change. Over the past 10 years it has been hit repeatedly by floods and droughts, though its earlier problems have included extreme temperatures, epidemics and earthquakes. Consequently, any arrangements concerning the Nile deeply concern Sudan. Sudan’s position is less acute than Egypt’s in that it also gets water from the White Nile, which comes up from Uganda and South Sudan and is not impacted by the GERD.

It will be difficult for Ethiopia to walk away from its position on filling up the reservoir. Much of this has to do with the country’s history from the 1970s to the present. Although Ethiopia was one of the few African countries to escape a lengthy colonial period, its postwar political life was thrown into considerable upheaval, beginning in 1974 when a Marxist revolution violently overthrew Emperor Haile Selassie. This was followed by the Qey Shibir (a Red Terror which killed an estimated 500,000-750,000 people in 1976-1977), famines in the 1980s (which killed over one million people) and rebellions. The Marxist regime was finally brought to an end in 1991. Two years later, Ethiopia lost its coastline when Eritrea finally seceded, while its neighbor to the southeast, Somalia, fragmented in the aftermath of the Siad Barre dictatorship, with some regions giving birth to radical Islamic groups affiliated to al-Qaeda or the Islamic State.

Despite the loss of a coastline, the 1990s marked the beginning of an Ethiopian revival. As the Financial Times’ David Pilling noted: “For the past 20 years, its economy has grown annually at close to 10 percent. This has transformed what had been one of the world’s poorest states into a country with a fighting chance of reaching middle-income status by 2025, despite its own deep political instability. The mega-dam on the Blue Nile, financed by patriotic bonds, is a potent symbol of Ethiopia’s renaissance.”

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