Ethiopia – Grand Renaissance Dam

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As the government pushes forward with huge dam project, concerns resurface about the downstream impact.

The government of Ethiopia is currently constructing the Grand Ethiopian Renaissance Dam (GERD), which once completed will be the largest hydropower facility in Africa.

The huge project will contribute around 6000 MegaWatts (MW) of power, nearly triple the country’s current electricity generation capacity, and will also present an important source of economic revenue for the government.

The project is seen by Ethiopia as a strong symbol of unity, with the Ethiopian Herald claiming that it fills Ethiopians with hope, not just a development project but a symbol demonstrating the wish to overcome poverty.

Statistics from 2016 show that around 30% of Ethiopia’s population have access to electricity with more than 90% of households still relying on traditional fuels for cooking, leading to respiratory infections, which are the main cause of death in the country.

The Ethiopian government rationalises the project in these terms and the economic benefits are clear. Critical commentators, however, have pointed out that in areas in which 70% of the population rely on subsistence agriculture, standard of living needs to improve before Ethiopians will consume additional electricity. Unless the electricity is subsidised by the government.

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Grand Renaissance Dam – All Africa

The government also sees crucial revenue opportunities, particularly through electricity exports. Power purchase agreements have already been signed with Djibouti, Kenya, Rwanda, Sudan and Tanzania.

But there are concerns about how this dam will affect downstream states, in particular Sudan and Egypt. Initially, Sudan was opposed to the construction of the dam, but has since agreed to purchase electricity upon its completion, and the respective countries have agreed to collaborate on a ‘free economic zone’.

In May 2017, the Middle East Monitor concluded that Egypt, Ethiopia and Sudan had just finished their 14th round of unsuccessful discussions about how to manage the Nile River.

The Ethiopian government expects it will take y five or six years to fill the GERD reservoir. In contrast, Diaa Al-Din Al-Qousi from Egypt’s Ministry of Water Resources and Irrigation said 12 to 18 years is needed to guarantee water security for Egypt.

The Geological Society of America said that the Nile’s fresh water flow to Egypt may be cut by as much as 25%, with the electricity generated by the Aswan High Dam in Egypt cut by a third. Egypt is already one of the most water-stressed countries in the world, reported the Institute of Security Studies.

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Nile Basin – Global Water Forum

Ethiopia insists that the project has been conducted with adequate transparency but since it was announced in 2011 Cairo has periodically demanded that construction cease, claiming it is protected by a 1959 treaty, that divides the river between Sudan and Egypt, but does not include Ethiopia.

Ethiopia, however, claims that it never signed the treaty and highlights that Egypt has not signed the Cooperative Framework Agreement (CFA) of the Nile Basin States.

Analysts at the US-based consulting group Stratfor have said that Egypt’s reaction will be determined by its political leadership, but that a large-scale reduction in water from the Nile would be intolerable to any Egyptian government’, reported the Institute of Security Studies.

Find out more in the Africa Research Bulletin:

WATER: Ethiopia
Economic, Financial & Technical Series
Vol. 54, Issue. 5, Pp. 21732B–21733C

WATER PROJECTS: Ethiopia – Kenya
Economic, Financial & Technical Series
Vol. 54, Issue. 2, Pp. 21624B–21625C

ETHIOPIA: Regional Powerhouse
Economic, Financial & Technical Series
Vol. 53, Issue. 9, Pp. 21411A–21412C

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Nile Basin – No Deal After Summit

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Discussions between Nile Basin countries fail to reach agreement as many leaders boycott talks.

The Nile Basin Summit from June 20-22nd was convened to provide an opportunity for the ten countries reliant on the River Nile to agree on the equitable use of the resource. Tensions around the vital water source have persisted for many decades.

Initial signs, however, were less promising as a number of leaders chose not to attend. Sudanese President Omar al-Bashir and his South Sudanese counterpart Salva Kirr notified the delegates that they would skip the event.

The summit brought together all countries along the River Nile and was attended by Egyptian President Abdel Fattah el-Sisi, Ethiopian Prime Minister Hailemariam Desalegn, South Sudan Vice President Joseph Wani, Burundi’s 2nd Vice President Joseph Butore and Sudan’s Vice President Hasabo Mohammed Abdul Rahman.

The leaders of Kenya, Rwanda, Burundi and Tanzania also turned down invitations to attend at the last minute, although no clear reasons for the decision were given by the respective embassies.

It was clear during the meeting that an agreement on the equitable use of resources was proving difficult as stakeholders repeatedly walked out of meetings at the Speke Resort Munyonyo in Uganda.

Led by Sudan, water security experts walked out a meeting at 10pm on June 21st, while Ethiopia followed suit. In the large the summit was organised to nudge Egypt, the biggest beneficiary of the Nile basin, to join the Nile Basin Initiative (NBI).

However, Egyptian Minister for Irrigation and Water Resources Mohammed Abdel-Atti said that his country would only rejoin if some provisions in the draft Cooperative Framework Agreement (CFA) were changed.

Al-Sisi reportedly said that his country was suffering from a water deficit of 21.5 billion cubic metres per year. However, although Egypt hasn’t yet rejoined NBI, it will engage in development projects in the region.

Speaking to journalists, Ugandan President Yoweri Museveni said he and his colleagues discussed development issues. Despite only three heads of state being present, Museveni said they decided to meet as leaders to discuss the ‘strategic issues of the Nile.’ reported the Observer. 

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Nile Basin – Source: Africa Water.

According to Museveni, prosperity for the Nile Basin countries is the best way to protect the river and other vital water systems in Africa. He pointed out a number of key threats to water systems.

These threats included the growing population, lack of electricity supply, lack of industrialisation, over-reliance on primitive agriculture and the destruction of the environment on which the Nile depends.

He said that industrialising the Nile Basin would resolve the problems of the bulk of the population engaging in primitive agriculture, pushing many into the industry and service sectors. He added that this would reduce the strain on the environment through the invasion of wetlands and destruction of forests for agriculture, reported the Uganda Media Centre.

Of course this sort of solution is denounced by others who note how industrialisation will lead to further environmental degradation and pollution, and raise levels of inequality as groups are incorporated, often on adverse terms, as labourers in the service or manufacturing economy.

Further, a deal between Egypt, Ethiopia and Sudan signed in December 2015 whereby the three countries agreed to end tensions over River Nile water, is also facing an unclear future due to ongoing tensions between Egypt and Sudan.

The two downstream countries at the end of April agreed to de-escalate tensions and end counter-accusations as well as import bans and deportations had brought relations between the two countries to tipping point.

Meanwhile Ethiopia continued its quest to bring Nile Basin countries on its side as its Grand Renaissance Dam nearing completion.

With electricity as a bargaining chip observers say Ethiopia will have an edge over Egypt which claims the majority share of Nile waters, given to it by a colonial agreement put in place by the British, reported the East African.

Find out more in the Africa Research Bulletin today:

Grand Renaissance Dam Project
Economic, Financial & Technical Series
Vol. 52, Issue. 3, Pp. 20795A–20795B

POWER: Egypt – Ethiopia – Sudan
Economic, Financial & Technical Series
Vol. 51, Issue. 8, Pp. 20543C–20545C

EGYPT – ETHIOPIA: Nile Dam Problems
Economic, Financial & Technical Series
Vol. 50, Issue. 10, Pp. 20154B–20155B

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Sudan – Darfur Referendum

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Voting will determine whether Darfur’s states are to be unified or kept as separate entities, although many boycott proceedings.

On April 13th voting concluded in a three-day referendum to decide as to whether to keep the current state divisions or to unite the Darfur area into one semi-autonomous administration; the vote was said to involve around 1.4m citizens and more than 500 voting centres in 18 localities, although many opposition groups did not participate and accused the government of rigging.

The referendum had been condemned by the United States (US), claiming it would undermine the peace process. According to the US government, due to the ongoing conflict in Darfur, the insecurity would mean that many would be unable to participate in the vote.

According to the Sudan News Agency (SNA) around 2500 observers participated in overseeing the vote. Chairman of the National Group for Civil Society Organisations, Ibrahim Shaglawi, said that they provided logistical support across Darfur during the referendum, and affirmed the neutrality of all observers.

A united Darfur has long been the aim of the rebels fighting the Sudanese state but they have largely denounced this referendum as unfair. The referendum was initially supposed to take place in 2011 following the Doha Agreement, signed between the Sudanese government and rebel groups.

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However analysts have stated that the result is likely to favour the current five-state system, as this reportedly gives Khartoum greater control.

Since January there have been reports of heavy fighting in the Jebel Marra region, and according to some analysts, the government, by holding this referendum, just wants to show the rest of the world that nothing untoward is happening.

“You have this picture being painted that Darfur is coming together,” said Ahmed Soliman, a political analyst from the UK-based Chatham House, reported by RFI.

Akshaya Kumar, deputy United Nations (UN) Director at Human Rights Watch (HRW), said “there’s been reports of gender-based violence mass rapes…and on top of all that, you have a dire humanitarian crisis, millions who still live in camps, further displaced. And people who are now being displaced,” reported RFI.

Many local leaders and activists called for a boycott of the vote, calling for people to stay at home and not to recognise the results. In North Darfur, activist Zahra Abdelnaim said that “the government has already identified the outcome of the referendum in advance.”

Religious leader Sheikh Younis Matar described the referendum as “aiming to turn the ownership of the province over to new settlers bought from West Africa”. A development expert and consultant, El Walid Adam Musa Madibo said that it “aims to divide Darfur and legalise tribalism,” reported Radio Dabanga.

On April 13th, one man was arrested by the Sudanese National Intelligence and Security Services (NISS) for drawing offensive caricatures mocking the lack of turnout in the voting process. On April the 12th two people were detained protesting in Khartoum, while on April 11th, three students were detained at El Fasher University, reported Radio Dabanga.

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Zam Zam IDP camp, Darfur CC 2007

In 1994 the Sudanese government decided to split Darfur into three states, fuelling unrest that eventually led to fighting, with many rebels from the Fur tribe, the largest tribe in the Darfur region, claiming that the split into states helped the central government enact greater control.

In 2003 the conflict in Darfur began when largely non-Arab tribes rose against the Arab-led government under current President Omar al-Bashir. According to the UN more than 300,000 people have been killed in Darfur, 4.4m need assistance and more than 2.5m have been displaced.

The two main rebel groups fighting in Darfur, the Justice and Equality Movement and the Sudan Liberation Army (SLA), have accused the government of rigging the vote to keep Darfur split into several states, reported Reuters.

Al-Bashir himself, continues to rule in Sudan despite an 2009 indictment by the International Criminal Court (ICC) for charges of mass killing, rape and pillage against civilians in Darfur.

The vote is one step in a long and drawn out peace process that was originally negotiated in Doha; rebels have for many years requested more regional powers. However the recent upsurge in violence and widespread allegations of vote fraud, suggest that the peace process is a long way from being concluded.

Find out more in the Africa Research Bulletin

SUDAN: Darfur Fighting Continues
Political, Social & Cultural Series
Vol.53, Issue.3, Pp.20942C–20943B

SUDAN: Peace Talks End without Deal
Political, Social & Cultural Series
Vol.52, Issue.11, Pp.20797C–20798A

SUDAN: Further Attempts at Dialogue
Political, Social & Cultural Series
Vol.52, Issue.10, Pp.20762A–20762B

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South Africa – ANC decide to leave the ICC

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The government decides to withdraw from the ICC, with concerns this could set a continent-wide precedent.

According to a ministerial representative for the South African government, they are planning to withdraw from the International Criminal Court (ICC), amongst growing external pressure as authorities ignored a court order to arrest Sudanese President Omar al-Bashir earlier in June.

Al-Bashir who is wanted by the ICC for crimes against humanity and genocide charges in Darfur, was allowed to leave South Africa after an African Union (AU) Summit, despite a ruling by a South African court to detain him. President Jacob Zuma, according to al-Jazeera, chose loyalty to a fellow AU member rather than his commitments to the ICC.

The decision prompted wide ranging international criticism; the Economist went as far to say that “Nelson Mandela’s legacy has been soiled”. Also internally human rights organisations, executive leaders and judicial members were involved in heated debates.

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Omar al-Bashir (CC)

If South Africa leaves, it will be the first country to leave the ICC, amidst a current context of numerous accusations of an anti-African bias, from a number of leaders on the continent; particularly as the only people to be successfully tried at the court have been Africans.

When South Africa first joined the ICC in 1998, the apartheid era was just coming to an end, and they had hoped that the rest of the world would follow. Even today only 123 countries have ratified the Rome Statute, which aims to prosecute those responsible for the worst international crimes, with notable absentees including the United States (US), Russia and China.

A Deputy Minister in the South African Presidency, part of the ruling African National Congress (ANC) congress, said that the ICC has “lost its direction”, accusing powerful nations of trampling on human rights and pursuing “selfish interests”, reported UK-based the Guardian.

If the decision ends up a reality then it will embody some of the fundamental problems with international jurisprudence, particularly that the ICC is powerless to enforce its authority on its own member states.

The decision taken by South Africa is particularly poignant as it sends a signal from what is perceived by many to be one of the most advanced democracies on the continent, setting a precedent for other countries to follow suit. Earlier in 2013 a group of African states, angry at charges levelled against Kenyan President Uhuru Kenyatta, called for a continent-wide withdrawal from the ICC.

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On the other hand, ICC supporters have claimed that such narratives are using ‘pan-Africanism’ as a cover from international scrutiny and human rights law, arguing that the ICC is in fact a hugely valuable tool for “rampant legal impunity”, reported al-Jazeera.

Others have noted that the apparently disproportionate targeting of Africans by the court is explained, in part, by statistical probability. Africa accounts for 34 of the court’s member states, as well as a large percentage of the violent conflicts that produces charges pursued by the court.

Ventures Africa comment that it is important to note that in the eight African countries of which the ICC has operated, the governments of Cote D’Ivoire, Central African Republic (CAR), Democratic Republic of Congo (DR Congo), Mali and Uganda have all requested that the ICC probe crimes on their soil. Only Libya and Sudan have had their cases referred by the United Nations Security Council (UNSC).

However the decision would still need to be ratified by both the upper and lower houses of parliament as much of the ICC regulation has been incorporated into domestic legal procedures, reported BBC News; although the ANC does have a large majority in parliament.

Minister for International Relations Maite Nkoana-Mashabane said that the government is taking the idea seriously, adding that the matter is on the agenda for the next meeting of ICC members at The Hague in November.

In regards to alternatives, RFI report that there have been murmurs of a transfer of authority for such international cases, in Africa, to the African Court of Justice and Human Rights, although current proposals have excluded charges brought against heads of state, as is currently in place with the ICC. Additionally the ongoing trial of Chadian ex President Hissène Habré, by a Senegalese court, has signalled wider financing issues, as the trial was delayed for many years due to a lack of funds.

Find out more in the Africa Research Bulletin

South Africa-Sudan-ICC
Political, Social & Cultural Series
Vol.52, Issue.7, Pp.20695B

South Africa-Sudan-ICC: Arrest Row
Political, Social & Cultural Series
Vol.52, Issue.6, Pp.20623B–20624C

Sudan: Damning HRW Report
Political, Social & Cultural Series
Vol.52, Issue.2, Pp.20473C–20474C

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Sudan – Gold Mining and the Darfur Conflict

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‘Unprecedented’ developments for Sudanese gold, but critics warn of the links between the mineral and the deadly conflict in the country

On July 29th the Sudanese government and Russian counterparts signed an “unprecedented” gold exploration agreement between the Sudanese Ministry of Minerals and the Russian Siberian Mining Company Limited. The contract covers nine blocks in Red Sea and River Nile states, which will equate to some 8,000 ton of Gold;  “these quantities will contribute to an economic boom and change the status of the country,” said Minister of Minerals Dr. Ahmed Mohamed Sadiq al-Karouri, reported Radio Dabanga (30/7).

Al-Karouri explained that the agreement would give the Sudanese government 75% of the production while the company would take 25%. Gold extraction has been one of the important economic alternatives for Sudan after losing oil revenues by South Sudanese secession and the new deals are hoped to contribute further to this; Sudan currently stands third behind South Africa and Ghana in African gold production.

Earlier last February, Sudan granted nine Russian companies permission to explore gold and other minerals. Many other foreign companies are engaged in the gold investment field; the Ministry of Minerals recently signed an agreement with the French Gold Mines Company for a block in Al-Burgaig locality in the Northern state, reported the Sudan News Agency on July 27th.

Until 2012, 74% of the country’s proven gold reserves were being managed through two companies: the CanadianEgyptian-Sudanese joint venture Ariab 10 and the Moroccan-Sudanese venture Managem. While these mines attracted criticism for poor labour conditions and environmental adversities, the gold production was less connected with internal and regional wars.

In 2012 the situation changed with the discovery of deposits in North Darfur; in Jebel Amer locality the discoveries attracted at least 100,000 artisanal miners to the area; artisanal gold has since surpassed industrial production. With the loss of oil revenues from the South Sudanese secession, gold has become the lifeline for foreign exchange and efforts to rebuild and stabilise the economy; President Omar al-Bashir himself saying “we lost oil, we got gold.”

However a recent report by ‘the Enough Project‘, entitled ‘Fools Gold: The case for scrutinising the Sudanese conflict gold trade‘ (available here), provides a critical analysis of the gold industry in Sudan, highlighting how it is helping to destabilize Darfur, Blue Nile, and South Kordofan; often mining areas see significant rates of violence and revenues that benefit rebel groups such as the Sudan Peoples’ Liberation Movement-North (SPLM-N) in South Kordofan.

In Darfur, revenues in the Jebel Amer region are benefiting Musa Hilal, a Janjaweed leader blacklisted by both the United Nations (UN) and United States; the report recommends that this should be used as a precedent to investigate the role of the gold trade in driving violence in the region; however it also recognises that it is almost impossible to distinguish between gold from conflict areas and from other legitimate sources.

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CC Julien Harneis 2011

 

Over the last three years multiple gold rushes have taken place  and Sudan’s Central Bank pays more than gold is worth on the world market to spur production – which currently accounts for 70% of exports and is worth US$ 2.5 billion. With the gold trade came criminals carrying “arms of every calibre,” a unnamed local said that  “you could find any weapon in Jebel Amir, as well as imported alcohol, drugs, prostitutes.”, reported the International Crisis Group (ICG) last year.

On July 23rd Radio Dabanga reported that the Revolutionary Awakening Council (RAC), headed by Musa Hilal had declared that it was in control of the mining area of Jebel Amer in North Darfur. Hilal established the RAC, together with North Darfuri tribal leaders, at the beginning of 2014 and in December last year, the RAC announced the formation of a new management board for the Jebel ‘Amer gold mining area.

In January 2013, a dig in Jebel Amir — where “each bag of 50 kg of sand contained 1 kg of gold,” according to miners — became the source of fighting between members of the Beni Husein tribe, which has held the land since colonial times, and the Rizeigat tribe, which is made up of nomads without traditional land rights in North Darfur who have increasingly started to settle on others’ territory. Both tribes have members in the Haras-al-Hodud (Border Guard), a government paramilitary body initially designed to patrol Sudan’s frontiers, explained the ICG.

Officially, Sudan has deployed 30,000 army troops and 20,000 Haras-al-Hodud to Darfur although there is difficulty in telling how many of those troops are still fighting in their official role rather than according to their tribal affiliations; there are presumed to be as many as 200,000 militiamen in Darfur.

“More than a decade into the Darfur conflict, it would be reductive to simply blame the government’s militia strategy. There is plenty of blame to go around. The government, the rebels, and all the other players need to work together to stop the violence in all Sudan’s peripheries. Uneasy concessions are needed. The government will have to send clear signals that it is bringing to an end an increasingly costly counterinsurgency strategy and that it will start allocating resources to peaceful activities instead. And rebels will have to show that they are loyal to more than their own tribes”, said the ICG report.

Find out more in the Africa Research Bulletin

Sudan: Gold Rush Leads to Disaster
Economic, Financial & Technical Series
Vol.50, Issue.4, Pp. 19935A-19936C

Sudan: Darfur Mines Battle
Economic, Financial & Technical Series
Vol.50, Issue.1, Pp. 19841B-19841C

Gold: Sudan
Economic, Financial & Technical Series
Vol.48, Issue.10, Pp.19320A-19320B

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Nile Basin – Water Politics

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Shifting regional politics as the approval of Ethiopian dam and co-operative agreement may signal new directions in dispute over Nile-basin water resources

On March 23rd, Ethiopian Prime Minister Hailemariam Dessalegn, Egyptian President Abdel Fattah al-Sisi and Sudanese President Omar Al-Bashir, met in Khartoum and signed an agreement on the ‘Declaration of the Principles’ of the Grand Ethiopian Renaissance Dam (GERD).

Ethiopia started diverting water from the Blue Nile in 2013 for the construction of the 6000MW dam in the Benishangul region near the Sudanese border. It will be Africa’s largest when completed in 2017, at 1,780 metres long and 145 metres high, costing around US$4.8 billion, reported Al Jazeera.

Egypt, largely reliant on the Nile for water and agriculture, had opposed the proposed dam claiming that it would reduce its already strained water supply and the energy generating capacity of its Aswan dam possibly by 30-40%, reported Al-Monitor.

Under current colonial-era treaties Egypt and Sudan receive the majority of water from the Nile; the 1959 Nile Waters Agreement, was a revision of an earlier English-Egyptian agreement, governing infrastructure projects and water allowances. However while Sudan has supported the GERD, Egypt has often boycotted negotiations. In the past the dispute between Ethiopia and Egypt has degenerated into threats of war.

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AFP reported that on March 24th, the day following the meeting in Khartoum, Al-Sisi met with Dessalegn in Addis-Ababa, he explained that “the agreement…represents a positive step on the right path. We’re not going to waste any more time”. This position marks a considerable change from his predecessor Mohamed Morsi, who opposed the “theft of the Nile”.

Rwandan Internal Security Minister Sheikh Musa Fazil Harerimana hailed the agreement as “unprecedented historical action… a step towards increased cooperation as well as regional peace and stability”, report the New Times.

In 1999 the Nile Basin Initiative (NBI) was founded as a ‘framework for co-operation’ and a ‘regional inter-governmental partnership’ led by Burundi, DR Congo, Egypt, Ethiopia, Kenya, Rwanda, South Sudan, Sudan Tanzania and Uganda.

However water demands and populations continue to grow; the report by ISS estimates that the Nile basin population will double by 2050. Already existing pressures on the water supply include consumption needs, irrigation, energy demands from hydro-power, and environmental and climatic factors.

In 2010 the Cooperative Framework Agreement (CFA) was introduced to replace the NBI by countries who wanted more access to water and did not want to seek Egypt’s permission before implementing projects on the Nile. It has been signed by Rwanda, Uganda, Burundi, Ethiopia, Tanzania and Kenya, while Egypt and Sudan blocked the operationalisation of the agreement, explains the ISS report.

Often the upstream countries have favoured co-operative deals, while downstream countries have stuck to colonial decrees that provided Egypt and Sudan exclusive rights to the water; Egypt opposed the CFA claiming that it would deprive them of their veto power over development projects on the Nile, on which they are much more dependant than ‘upstream’ countries.

Sudan ended a two year boycott of the NBI in 2014 but Egypt continued its stance. Additional confusion as to whether a newly independent South Sudan had any ‘official rights’ to the Nile water led to intense external pressure to ratify the CFA, a move opposed by Egypt. South Sudan however, did not sign the agreement and instead signed a military agreement with Egypt in March 2014, report Le Monde diplomatique.

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In recent years the financing arrangements have also changed; funding for infrastructure projects used to come from the Nile Basin Trust Fund (NBTF) managed by the World Bank. Now other investors, largely from China, have allowed governments to push ahead with smaller projects without considering resulting consequences for other countries.

Similarly, recent regional events have made the politic situation increasingly unpredictable; domestic instability in many of the Nile basin countries is rising and tensions between states continue, disputes may be reignited as water sources are strained by plans to turn the Nile into an “axis for development”.

The historical trans-boundary water relations are changing and Egypt’s support for the GERD may signal a shift in direction. Egypt’s State Information Service explained that “the agreement is considered a road map for action in the future as it lays down the bases for maintaining the Egyptian rights and helps promote confidence-building measures within a political, legal and technical framework”.

Find out more in the Africa Research Bulletin:

Egypt-Ethiopia: Nile Dam Problems
Economic, Financial & Technical Series, 
Vol.50, Issue.10, Pp.20154B-20155B

Egypt-Ethiopia: Battle for the Nile
Political, Social & Cultural Series, 
Vol.50, Issue.6, Pp. 19729B-19730B

Nile Basin: Egypt and Sudan Cling to Historic Rights
Political, Social & Cultural Series, 
Vol.47, Issue.5, Pp.18389A-18390A

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Islamic banking continues rapid growth

Already a rapidly expanding sector in Kenya, Tanzania, South Africa, Egypt, Sudan and Nigeria, Islamic banking now looks set to develop elsewhere, too, as the governments of Ghana, Uganda, Ivory Coast, and Somalia begin making strident efforts to introduce the system.

The practice has been identified as having huge growth potential in Africa, where Muslims constitute 51 percent of the population.  More than 250 Islamic financial institutions, including Islamic banks, Takaful companies, Islamic Funds, Modarabas, and Islamic Microfinance, are already operating in Africa, according to research by MicroFinance Africa.

A recent article by the Nigerian Daily Trust newspaper suggests that the growth of Islamic banking may owe partly to the failure of the Western banking system that precipitated a worldwide financial crisis that is yet to end.

“Non-Interest (Islamic) banking may be seen as a recent financial system improvised as alternative to tackle the turmoil inherent in conventional banking system. However, there were earliest references which suggest that Islamic banking came into the picture first in Egypt in 1963. This pioneering effort was achieved by Ahmad El Najjar who brought the idea into existence, whose key principle was profit sharing (non-interest based philosophy of Shariah). By the end of 1976 there were 9 such banks in Egypt alone. These banks neither charged nor paid interest but their activities were mostly limited to trade and industries where these banks invested directly or as partners of depositors.”

Indeed, the reasons appear both numerous and complex, but the rise of Islamic banking is a trend to keep an eye on.