Tag: Egypt

Sudan, Egypt, Ethiopia resume talks over Nile dam dispute
Middle East & Africa

Sudan, Egypt, Ethiopia resume talks over Nile dam dispute

Nile dam dispute: Ethiopia, Sudan and Egypt have agreed on resuming negotiations to settle the Nile dam dispute

Sudan, Ethiopia and Egypt on Sunday agreed on resuming talks to resolved the long-running dispute over the massive dam on the Blue Nile in Ethiopia’s capital city Addis Ababa. 

According to Egypt’s foreign ministry spokesperson Ahmed Hafez, foreign and irrigation ministers of the three countries met online to hold fresh talks to negotiate the deal. The meeting was called by the current head of the African Union (AU), South Africa. As per a statement released by Sudan’s water ministry, officials, experts and observers from the three countries, AU and the United States participated in the virtual conference.

The statement also confirmed that this week’s discussions are aimed at concluding the negotiations to reach a deal by the end of January 2021. 

“The talks will pave way for the resumption of tripartite negotiations on Sunday, January 10 in the hope of concluding by the end of January,” the ministry said, as quoted by reports. 

Earlier attempts to initiate three-way negotiations to enter an agreement between Sudan, Egypt and Ethiopia failed after Khartoum did not attend the talks called by South Africa in November 2020.

The dispute refers to a 2011 hydropower project centering to the filling and operation of the huge reservoir behind the Grand Ethiopian Renaissance Dam (GERD). The largest hydroelectric dam in Africa has caused unprecedented tensions between the three countries in the region. 

Egypt is fearing that the dam would gravely impact its source of water, noting that 97 percent of its drinking and irrigation water come from the Nile. Sudan, on the other hand, has warned that several lives would be affected in the region in the absence of a concrete deal.

Egypt and Sudan have also expressed concerns over the amount of water Ethiopia will release downstream in case of a multi-year drought. In this regard, both countries have called for a legally binding agreement to resolved the dispute.

However, the Addis Ababa government has insisted that downstream water supplies to these countries will not be affected. In its defence, Ethiopia, the second-most-populous country in Africa, has also maintained that its 110 million people is significantly dependent on the hydroelectric power produced at the $4.6 billion dam.

After weeks of boycotting the talks, Sudan urged the African Union to intervene in the negotiations to reach a deal. 

In July 2020, Ethiopia has announced that it successfully reached its first-year target for filling the dam’s reservoir. 

MENA region to attract increasing foreign capital inflows
Middle East & Africa

MENA region to attract increasing foreign capital inflows

IIF projects GCC nations to drive external capital inflows in MENA region amid demand for hard bonds

COVID-19 has presented multiple shocks for emerging markets with collapsing capital inflows and domestic and external demand. Amid ongoing efforts to recover from pandemic repercussions, the Institute of International Finance (IIF) has stated that capital inflows in the Middle East region are anticipated to remain high. Speaking to Gulf News, IIF Chief Economist for MENA region Garbis Iradian said that the institution is expecting non-resident capital inflows to the MENA countries to increase up to $177 billion in 2021, which is significantly equivalent to 6.6 percent of the GDP of the region. 

As per the report, hard currency bond issuance of GCC countries is playing a significant role in increasing the capital inflows, adding that countries like the UAE, Saudi Arabi, Oman, Bahrain and Qatar have issued hard currency bond worth $91 billion so far in 2020, as compared to a total of $99 billion in 2019. 

At the same time, GCC’s funding needs are also projected to increase in 2021 even as fiscal deficits have narrowed. Gulf countries are driving the requirements for high-quality assets which will result in the growth of gross public external financing of the region to approximately $100 billion by next year.

Meanwhile, Foreign Direct Investment (FDI) continues to remain low in MENA countries in the backdrop of economic repercussions of the COVID-19 pandemic. It is prominently concentrated in the oil and gas sectors in the region, with the UAE and Egypt standing high as the highest FDI recipient in the MENA region.

As per an IMF report in January 2020, the Middle East and North Africa region has been witnessing high and stable gross capital inflows in the last years compared to other emerging markets, providing a boost to investment and job creation in the countries. 

After MENA countries integrated into the global capital markets, their capital inflows surged to over $155 during 2016-2018.

However, the UN organization has also raised concerns about the increasing global economic risks that would put MENA countries in a vulnerable position due to shifts in fiscal deficits, debt burdens and financial buffers. The IMF had recommended MENA countries to improve their policy framework in a bid to strengthen their resilience to volatile capital flows and mitigate the risk of outflows. 

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