The $4.7 billion hydroelectric dam that Ethiopia is building across the Blue Nile will give the country 6,000 megawatts of much-needed power. However, there is a real danger that this project could rob Egypt of much-needed water downstream.  The whole issue of the plans for the Great Ethiopian Renaissance Dam is an object lesson in how not to set about an undertaking which affects precious natural resources.

As with so many disputes in Africa, generally involving frontiers, the seeds of the problem were sown in colonial times. In 1929 the British concocted a treaty between the Egyptian and Sudanese governments, both of which they ran, which gave Egypt the right of veto over the use of the Nile’s waters by any countries upstream. At the time Abyssinia, now Ethiopia, was six years away from being invaded by Mussolini’s Italian fascists and was not consulted. The source of the Blue Nile is Ethiopia’s Lake Tana. The longer White Nile rises in Rwanda and flows through Burundi, Tanzania, Uganda and Southern Sudan. Since in 1929, East Africa was occupied by the British and Rwanda by the Belgians, no account was taken of local views. The British had tried to dam the Nile at Aswan as early as the 1890s but it was only in 1952 that the Nasser government managed the project.

The Great Ethiopian Renaissance Dam had been mooted since the 1960s but it was only in 2010 that plans were finalized. Throughout the process, Cairo had made plain its concerns that water would be diverted from the flow of the Nile.  Yet Addis Ababa has been deaf to such worries, preferring to press ahead instead with the new Nile River Cooperative Framework Agreement between the five other Nile-basin countries which deals with their own exploitation of the water of the river.

This is not the way to proceed.  The African Union has urged that all parties should enter into talks to find a deal which will satisfy everyone. At the moment it appears that the Ethiopian government is intent on pressing ahead with its plans regardless.  Last week, the first diversion of the Nile waters began, as part of the dam construction process. It is not yet clear what effect this has had on the downstream flow in Egypt.

What is clear, however, is that Addis Ababa’s unilateral action has backed the Egyptian government into a corner. President Mohamed Morsi has warned that his government is keeping “all options open”. Just what those might be, became apparent when members of his administration were caught on an open TV studio microphone discussing the possibility of military action.

Such an option would be the greatest folly, but it demonstrates just how alarmed Egypt is at the potentially catastrophic consequences for its agricultural sector of a low Nile flow. Egypt and Ethiopia have similar-sized populations of around 84 million people, and both countries are  growing fast. Ethiopia’s need for power cannot be denied, but then neither can the crucial importance of Nile water for Egypt.

This is arguably the greatest diplomatic challenge that the African Union has yet faced.  Supported by the international community, including the US, which has played an important role in the planning of the Ethiopian dam, a workable compromise must be found, and quickly.