By Farah Atia
Three Egyptian projects worth $50m will be launched in Ethiopia’s first industrial zone over the next month in an attempt to strengthen Egyptian-Ethiopian ties, according to the head of the Badr Investors Association.
Alaa Alsokti highlighted the “role the economy plays in strengthening relations between the two countries,” and urged the government to give Egyptian businessmen and companies the opportunity to play a political role in calming growing tension with Ethiopia.
The plants, owned by Egyptian investors and companies, specialise in electrical transformers, office furniture and medical equipment.
Rising population, pollution and environmental degradation have caused increasing water scarcity for Egypt. The country is facing an annual water deficit of around 7bn cubic metres, with the United Nations already warning that Egypt could run out of water by 2025. Alsokti stressed that many Ethiopians are keen that the dam not worsen Egypt’s water situation.
“There has been a significant boost in ties between us and the Nile-based countries in the past two years,” President Mohamed Morsi told the Conference on Egypt’s Rights to Nile Water this month, adding that there has been a 50% increase in trade, with Egyptian investments in Ethiopia now amounting to $2bn.
According to a statement by the Ethiopian government: “The Nile basin has been tying the two countries and their peoples together for millennia.” It noted that while the river could represent a source of cooperation for the two countries, this has not always been the case, calling the issue of Nile water a “sticking point in the relationship, a major stumbling block to any sort of robust bilateral link that might have enhanced the interests of both countries.”
According to the statement, successive Egyptian governments have sought to ensure their continued control of the Nile water, and because of this, it has not been possible to establish a strategy for the river based on mutual agreement, adding that upper riparian countries, including Ethiopia, for a long time suffered from a lack of sufficient resources to develop their legitimate claims to usage of the Nile water.
“The policies pursued by Egypt on this didn’t help the confidence of the upper riparian countries towards this issue. There is a strong conviction in Ethiopia, which has been well-founded, that efforts have been made to prevent Ethiopia from accessing support for the purpose of obtaining the necessary financial support for hydro-electric projects, even where these projects would pose no harm whatsoever to Egypt.”
According the Egyptian Embassy in Ethiopia, the Ethiopian government offers Egyptian investors exemption from import duties on construction materials needed to create new projects or to expand and develop existing projects. Capital goods may be imported without payment of customs duties and other taxes.
The government also allows giving out loans to investors by Ethiopian banks and provides all appropriate land investment and infrastructure services such as electricity, water and telecommunications, provided that the investor meets the conditions and requirements of national investment.