Water Resources Management in the Nile Basin: The Economic Value of Cooperation

Abstract

Since 1999 a multilateral effort termed the Nile Basin Initiative has been underway among the Nile riparians to explore opportunities for maximizing the benefits of the river’s waters through cooperative development and management of the basin. However, to date there has been virtually no explicit discussion of the economic value of cooperative water resources development. We believe that a serious discourse among Nile riparians about the economics of Nile cooperation is both inevitable and desirable, and that this discourse will not diminish the importance of environmental, social, or cultural issues that new infrastructure on the Nile will entail. To initiate such a discussion, in this paper we present the results of the first economic model designed to optimize the water resources of the entire Nile basin. Total (potential) annual direct gross economic benefits of Nile water utilization in irrigation and hydroelectric power generation are estimated to be on the order of US$7-11 billion. This does not account for the costs of building or operating the infrastructure.

Keywords: water conflicts, Nile basin, cooperation, economic optimization