The Nile Basin Initiative was established in 1999 to develop a scheme for the equitable distribution of water among the Nile basin countries. Ethiopia, Uganda, Tanzania, Rwanda and Kenya have signed the Agreement on the Nile River Basin Cooperative Framework (Entebbe Agreement). This agreement allows construction of projects that do not “significantly” affect the Nile water flow. Egypt has rejected the Agreement because it necessitates renegotiation of its share of the Nile water and surrender of its veto power guaranteed under the old agreements.
Water, Water Everywhere… and Meles Zenawi’s “Damplomacy” of Brinksmanship
Whether there will be an actual “Grand Renaissance Dam” is the $5bn dollar question of the century. Because Egypt has been successful in pressuring multilateral development and investment banks not to fund the project, the regime in Ethiopia has defiantly forged ahead to fund the project itself. But is self-funding of the mother of all African dams a realistic possibility?
The regime has kept much of the details of the Dam behind smoke and mirrors. The regime claims that the dam is 14 percent complete (whatever that means) and will reach 26 percent completion by the end of 2013. When it comes online in 2015 as scheduled, the regime claims the dam will have the power generating capacity of nearly 6,000MW, much of it to be exported to the Sudan, Egypt and the Arabian peninsula.
But the whole “Grand Renaissance Dam” project is being staged in the theatre of the absurd. Is it possible to raise USD$5bn by 2015 from the people of the second poorest country in the world, the vast majority of whom live on less than USD$1? The dam is said to cost as much as the country’s total annual budget of USD$5bn. Is the largest recipient of international aid in Africa capable of raising multiple billions of dollars from its citizens for the Dam? Can a country which “lost US$11.7 billion to illicit financial outflows between 2000 and 2009” be able to undertake construction of a USD$5bn dam (unadjusted for cost overruns) on its own? According to the World Bank, Ethiopia’s “power sector alone would require $3.3 billion per year to develop” in the next decade. Can the regime in Ethiopia be able to build the largest dam in Africa and other energy projects resorting to such “desperate measures” as “musical concerts, a lottery and an SMS campaign to raise funds”? Can a country which the IMF describes as having “foreign reserves [that] have declined to under two months of import coverage” as of June 2012 really be able to build the largest dam in African history? Can a country whose external debt in 2012 exceeded USD$12bn be able to build a $5bn dollar project?
The regime has forged ahead to build the “Grand Renaissance Dam” by “selling bonds” domestically and in the Ethiopian Diaspora. The regime claims to have collected USD$500 million from bond sales and “contributions” of ordinary citizens. Business and institutions have been forced to buy bonds. The regime’s Diaspora bond sales effort has been a total failure. Most Ethiopians in the Diaspora have been unwilling to bet on imaginary and speculative future earnings from operations of the dam because of the regime’s morbid secrecy and lack of transparency. They have little confidence in the regime’s capacity to guarantee their bond investments. For instance, current underpricing in power tariffs which have ranged between “$0.04-0.08 per kilowatt-hour are low by regional standards and recover only 46 percent of the costs of the utility.” That does not bode well for long term bond holders.
The regime in Ethiopia also has serious problems of cost overruns and poor project management in dam construction. For instance, the Tekeze hydroelectric dam on the Tekeze River, a Nile tributary, in northern Ethiopia was initially estimated to cost USD$224 million, but when it was completed seven years later in 2008, its cost skyrocketed to USD$360 million. How much the “Grand Renaissance Dam” will eventually cost, if built, is anybody’s guess. Regime ineptitude and mismanagement of Gilgel Gibe II on the Omo River in February 2010 resulted in a “tunnel collapse [which] closed the largest hydropower plant operating in Ethiopia, only 10 days after its inauguration.”
To add insult to injury, the Meles regime has the gall to say that it intends to sell the power from the “Grand Renaissance Dam” to the Sudan, Egypt and the Arabian peninsula once construction is complete. That is not only nonsensical but downright insane! Why would Egypt or the Sudan buy power from a dam that damns them by effectively reducing their water supply for agriculture and their own production of power?
Meles Zenawi and his disciples have always known that they do not have the financial capacity to complete the Dam. They also know that actually completing the constructing the dam will be dangerous for their own survival as a regime should regional war break out. But Meles has always been a peerless grandmaster of intrigue, machination, duplicity, one-upmanship and diplomatic gamesmanship. With this Dam, he was merely pushing the envelope to the outer limits. His real aim was not the construction of dam but to use the specter of the construction of a gargantuan dam on the Nile to fabricate fear of an imminent regional water war. His price for continued regional stability, avoidance of conflict and maintenance of the status quo would be billions in loans, aid and other concessions from the international community and downstream countries.
Meles Zenawi’s diplomatic strategy shrouded a clever deterrent military strategy: If Egypt goes for broke and attacks the “Grand Renaissance Dam”, Ethiopia could retaliate by attacking the Aswan dam. Meles Zenawi likely believed the threat of mutual assured destruction will prevent an actual war while maintaining extremely high levels of regional tensions. By playing a game of chicken with Egypt and the Sudan, Meles Zenawi hoped to strong-arm donor and development banks and wealthy countries in the region into giving him financial, political and diplomatic support. There is no question Meles would have driven on a collision course with Egypt only to swerve at the last second to avoid a fatal crash had he been in power today. It is unlikely that Meles’ disciples have the intellectual candlepower (“megawattage”) or the sheer cunning and artfulness of their master to play a game of chicken with Egypt to skillfully extract concessions.
For Love of White Elephants and War of the Damned
Water is a source of life. War is a source of death. The water of the Nile has given life to Ethiopians, Egyptians and the people of the Nile basin countries since time immemorial. If Meles prepared for war by building his dam, his disciples shall surely inherit war. But Meles should have reflected on the words of Ethiopia’s poet laureate Tsegaye Gebremedhin before embarking on his “Grand Renaissance Dam” project: “O Nile, you are the music that restores the rhythm of existence…/ You are the irrigator that cultivate peace…/ …From my Ethiopia sacred mountains of the sun…”
Meles’ legacy could indeed be a water war of death and destruction on the Nile, but he will never have a cement monument built on the Nile to celebrate his life. Meles’ disciples would be wise to remember an old prophesy as they march headlong to build their doomsday dam on the Nile: “God gave Noah the Rainbow Sign: No more water. The fire next time!”
Professor Alemayehu G. Mariam teaches political science at California State University, San Bernardino and is a practicing defense lawyer.
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