Egypt eyes Ethiopia trade boost as Nile row eases

Reuters, Saturday 14 May 2011

Egyptian PM Sharaf talks up bilateral trade and describes a 'new atmosphere' to discussions with upriver neighbours over sharing Nile waters

Nile river
Sharaf hopes a new flow in trade will help ease Nile tensions (Photo: Reuters)

Egypt's interim Prime Minister Essam Sharaf offered to increase trade with Ethiopia on Friday and said a new atmosphere now existed with regional neighbours over the vexed question of sharing Nile river waters.

Cairo has been at odds with upriver nations over their efforts to overturn colonial era-treaties granting it a lion's share of the river's flow.

Nile basin countries including Ethiopia and Uganda signed a deal last year effectively stripping Egypt of its veto over hydro-power projects.

However, Addis Ababa said this month it was delaying ratification until a new government was installed in Egypt to replace authoritarian ruler Hosni Mubarak. Ethiopia had accused Mubarak of supporting rebels trying to destabilise the country.

"We were in Uganda yesterday and today we had discussions in Ethiopia, and the environment is completely different from the previous period," Sharaf told journalists following talks with members of Ethiopia's business community and a meeting with Ethiopian Prime Minister Meles Zenawi.

"With the concept that all should be winners - because we have huge resources, based on that there will be discussions and exchange of ideas," he said.

Sharaf also offered to increase trade between the two countries.

"When you look at trade between Ethiopia and Egypt, it's a tiny fraction of total trade. We have to take care of that, to develop means and tools to increase trade," he said.

Egypt, threatened by rising temperatures and a growing population, is almost entirely dependent on the Nile for its water and has been nervously watching hydropower dam projects take shape in upriver nations.

Ethiopia is building a multi-billion dollar mega dam on its share of the river, which accounts for 85 per cent of the Nile's water.

Ethiopian officials dismiss fears the dam would reduce the river's flow, and Sharaf said his country was willing to discuss its effects by joining a committee of Ethiopian, Egyptian and Sudanese experts.

"There will be committees and meetings, the scope is wider: to involve all development plans, including energy development, electricity, agriculture and industrial services," he said.

While Egypt and Ethiopia signed a cooperation agreement in 1993, relations have been at a low ebb since 1995 following an assassination attempt on Mubarak by Islamist gunmen during a visit to Addis Ababa.

Under a 1929 pact, Egypt is entitled to 55.5 billion cubic metres a year of the Nile's flow of around 84 billion cubic metres.

Since Mubarak's fall, the military-backed interim government has not openly criticised the new treaty, instead focusing on diplomatic ties in the search for a compromise.

Egyptians are expected to vote for a new leader in December.

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