China shifts power balance in the Nile river basin

Recent water wrangles between Ethiopia and Egypt show how Chinese-funded dams have shifted power dynamics in the Nile river basin

The growing intensification of economic, political and social ties between China and Africa in the last 15 years is often told as a story of copper, petrodollars, emerging Chinatowns and bilateral visits by heads of state.

But perhaps the most significant way in which Chinese actors are contributing to an evolving African political-economic landscape is very seldom discussed: an unprecedented wave of hydro-infrastructure construction is taking place.

Beijing is a key partner for the construction of big dams, the expansion of irrigation systems and the building of transportation canals. This is recalibrating the domestic political economies of major African states and altering how they relate to each other.

Toppling Egypt’s hydro-hegemony

Nowhere has China’s return to Africa been more consequential from a geopolitical water-angle than in the Nile Basin, which covers 11 African states. For decades, the geopolitics of the Nile have been violent yet predictable. Despite being downstream, Egypt has for generations been the “hydro-hegemon”: the country with the best economy; the largest population; the strongest military forces; the most international prestige; and the closest partnerships with global superpowers.

Cairo invaded Sudan and Ethiopia in the nineteenth century, and intervened heavily in Sudanese politics throughout the twentieth century, whilst also standing accused of interference in Uganda and Ethiopia. The reason was simple: given their profound dependence on Nile water (97% of domestic consumption comes from the river), Egyptian elites developed a mind-set that sought to maximise their control over water used throughout the basin.

Close relations with a succession of major powers — the UK (until the 1950s), the Soviet Union (until the mid-1970s) and the US ever since — provided the political and financial backing to entrench Cairo’s pre-eminent position in the basin through political-legal treaties, behind the scenes influence and actual construction of infrastructure for power generation, storage and irrigation. The record-breaking Aswan Dam was built after the 1959 Nile Waters Agreement reserved the bulk of the river’s flow for Egypt.

Egypt’s pre-eminence was disliked in the Nile Basin, but chronic domestic crises in Ethiopia, Uganda and Sudan meant that countries further upstream could not do much about Cairo’s hydro-hegemony. It was inconceivable that the international financial institutions would ever fund any major hydro-infrastructure projects upstream without Egypt’s explicit permission, particularly given the close alliance between Washington and Cairo.

Moreover, as dams were no longer considered very useful in the strategies of development economists (they came to be associated with mass displacement, corruption and environmental damage) there was even less of an incentive for Addis Ababa, Khartoum or Kampala to invest in such costly projects, which were only feasible with massive external support. This began to change in the 1990s when several forces internal to the region collided with China’s intensified role in Africa.

China revives old ambitions

China’s impact on the Nile Basin has been hugely consequential in two ways. The availability of Chinese technical skills, political support and capital has given African countries options that simply did not exist prior to the 1990s. While the World Bank had become reluctant to fund major hydro-infrastructure in the developing world, Chinese companies and banks, sensing profitable business opportunities, were very eager to help Sudan and Ethiopia harness their water resources and have since become major partners in the two most ambitious dam programmes in Africa.

Sinohydro, the world’s leading dam builder, has been central to the construction of the Merowe dam and the heightening of the Roseires dam in Sudan; with the also state-owned China International Water and Electricity Corporation closely involved in these multibillion dollar projects as well. Chin has provided loans worth more than US$1 billion for Merowe and for Uganda’s biggest hydro-infrastructure project, the Karuma dam, construction of which is about to begin. Chinese public funds and enterprises have also been crucial to Ethiopia’s dam-building. The Industrial and Commercial Bank of China is providing essential loans for the controversial Gilgel Gibe III dam after the World Bank, African Development Bank and European Investment Bank withdrew, citing ecological and social concerns.

Dams as “soft power”

But there has also been a second, more subtle form of influence exerted by Beijing. Big dams and hydro-engineering were crucial ingredients in China’s own domestic transformation. The prominent role played by mega-infrastructure projects in Chinese industrialisation has not gone unnoticed and is a form of soft power: as African countries have become disillusioned with “good governance” conditionality by traditional donors, and as the West’s fortunes have declined with the Great Recession, alternative models of development and political order have gained greater currency.

While the exact details of China’s economic miracle remain relatively poorly understood in the Nile Basin, several regimes (which several of my colleagues and I have termed “Africa’s illiberal state-builders”) have embraced a vision of entrenching political hegemony in their respective countries not dissimilar to that that of the Chinese Communist Party.  

The combination of political authoritarianism with strategic control of key sectors in the economy is seen as essential to the long-term survival of the ruling party; there is a consensus among elites that jobs need to be created and services provided to key constituencies so that significant portions of the population (though not necessarily a majority) consider continuing rule and economic stability provided by the dominant party in their interest. Big infrastructure projects are an important element in this long-term economic strategy

The grand strategy of Africa’s most famous illiberal state-builder, the late Ethiopian prime minister Meles Zenawi, is a good illustration of Chinese influence. Ethiopia’s ruling coalition has built a deep relationship with its counterparts in Beijing and has attempted to draw important lessons from the Chinese experience, in agricultural reform and political control as well as in instrumentalising the financial sector and, crucially, developing hydro-infrastructure.

Meles designed Ethiopia’s dam programme as a nation-building project – tying peripheral regions to the political centre – and turned it into the central axis of Ethiopian foreign policy, to acquire greater autonomy from the outside world and to link with Ethiopia’s neighbours through energy flows. The programme was ironically a result of the erosion of the West’s dominance, despite the World Bank’s role in co-writing much of the technical details of the planned hydro-infrastructure. Ethiopia’s ambitions are decades old, but were politically and financially unachievable until recently. China’s huge new role in the Nile Basin has made all the difference in Ethiopia, Sudan and elsewhere.

Discontent at the grassroots

The story of China’s most underestimated export, however, is not all rosy. While enthusiasm for dam-building is widespread among Nile Basin governments, large segments of the Ethiopian, Ugandan and Sudanese populations are deeply sceptical about these plans. The Merowe dam and the enlarged Roseires dam displaced more than 100,000 people, many of whom already had antagonistic relations with the Sudanese regime and who blame China for working with a violent, corrupt and exclusionary elite who does not provide adequate compensation or resettlement.

Similar anger – including mass arrests and deadly protests – has erupted in Southern Ethiopia over the Gibe dams, which threaten to ruin the livelihoods of tens of thousands of local communities, who will have to make way for capital-intensive sugar production, facilitated by irrigation waters released by the new hydro-infrastructure. If Chinese soft power in the economic realm is to be sustainable, far greater support from local populations for these mega-projects that are remaking East Africa is needed. While Chinese companies cannot assume tasks that a sovereign government should be responsible for, the increasingly ugly fall-out from hydro-development projects should encourage a reconsideration of how a more effective contribution can be made to sustainably develop Africa’s water resources.