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Water It's essential to daily life and well being, but across the African continent, investment into this resource is addressing vastly different initiatives.
This project makes Lesutu probably one of the most impactful countries in the world. In this says that this water powers the biggest economic hub in Africa.
With some countries facing crippling water shortages and some others with plenty to spare, water diplomacy is emerging as a potential solution to help ease the disparities.
I often say to the Prime Minister of Lisutu, what you get free from nature, you now package to sell to us. You then ask us to come and build the dam and build the channels to bring free water to Howding to Hannesburg, and then you want money for it, And he says, that's what small countries do.
On today's podcast, we'll look at a multi billion dollar water sharing deal between Lesutu and its neighbors South Africa and whether similar transnational deals can become commonplace across the continent. I'm Jennifer's Abasaja and this is the Next Africa Podcast, bringing you one story each week from the continent, driving the future of global growth with the context only Bloomberg can provide. And in a moment, we're going to speak with Olivier Kojels, who's had a fifty year career advising
governments across both Asia and Africa on water. He's also former CEO of the Mekong River Commission. But first I'm pleased to be joined by Bloomberg's Andre Pierre Duplaci, who traveled with me to Lusutu to find out more about progress on the Lusutu Highlands Water Project. We travel to Li Su Tuo together and you know better than most that this relationship between the Sutu and South Africa dates
quite a long way back. It'd be helpful, I think for viewers and listeners to actually understand where this is coming from before where it's going. Can you just give us a bit of history about this project.
I mean, the story starts decades before this treaty was signed in the nineteen eighties, so you know, people have an eyeing list Cuitus water. As far back as the nineteen fifties, engineers realized something quite remarkable. This small mountain kingdom, which only makes up a tiny part of the basin of the Orange River supplies a huge share of the water because of its high rainfall and altitude. You know, if you look at the topographic map of Southern Africa, it's quite fascinating.
It's a spike all around Leasutu.
I think it's about one thousand meter or just about three thousand foot in elevation. It's the highest independent nation on Earth, so you can imagine the amount of water it gets.
And so you know, fast forward. So engineers, obviously now.
They're thinking in the nineteen eighties, towards the end of a party, the South African government and places like Johannesburg, the industrial heartland of South Africa was growing at a rapid speed and so they looked to list to which at the time at very little else in terms of natural resources.
So the two countries.
Stroke a deal in nineteen eighty six to basically turn this geography into an economic partnership. And I think a lot of people say, oh, but what's so unique about this compared to other dams, other water sharing agreements on the continent. Well, this one focuses on sharing money as a commodity, so it monetizes.
Water, which makes it unusually commercial.
It's one of the few examples on the continent where water is effectively treated as an export commodity.
That sort of speaks to what we heard on the ground, which seemed to be that this new phase of the agreement and of the project could potentially mean something different for Lsuitu than years past. Did you get that same sense.
This treaty that's been signed in nineteen eighty six was very much based on the economics of the eighties. What I mean by that is, you know, at that time, governments around the world thought of these kind of engineering projects as an engineering solution and cost comparison.
So if we build.
It in Lacitu, South Africa arguit we'll share the savings. So Lasuitu right now in twenty twenty six, they still get a share.
Of South Africa's savings. But today, forty.
Years later, natural resources are usually priced based on scarcity. You know, living in Johannesburg, we see how this is the growing issue. So the more scarce were to become, you should automatically earn more. I think that's an argument that the National Resources Minister of LU told us, and that's a big reason I think why last too, now wants to revisit the deal which comes up for renewal.
The royalties agreement comes up for renegotiation, and part of this treaty says that every twelve years there should be some kind of discussion about what the core elements are of this nineteen eighty six deal, which it seems like the government of LSITU indicated that for the past decade they haven't really come to an agreement of what this new royalty payment should be.
Thanks ap, let's bring in now the role that water is playing in Pan African diplomacy. Joining me now is Olivier Kojels. He's had a long career advising governments across Asia and Africa on water issues and he's also Professor Emerita at you see levent Olivia.
Thank you so much for your time.
Maybe you can speak from your own perspective, how important are agreements like what we saw with Lissutu and South Africa going to be as more countries struggle with water shortages. What has been your experience in some of these treands boundary agreements.
Yeah, the agreements are absolutely essential, but one thing must be clear is that this specific case of risotto transfer to South Africa is a very unique and very specific because it's about selling water from one country to another, and that is not at all the situation elsewhere in Africa. So agreements are absolutely needed, that they are there already,
but they have to be inforced. But it's much more complex than just one country selling water to another, although I know it's already something very difficult in other African basins. The situation is even much more complex than that. I've been working in most of other African basins. Of course, after the Meccong, I have been a lot involved in the Night Basin with the Grant Ethiopian Rensaissance Dam and
the issues there between Ethiopia and Egypt and so. But I've been working the selling out basin, the nis Air Basin, the many many other Zambasi whatever. There are so many. There are sixty or more than sixty basins transboundary where situation is extremely complex because sometimes you have a lot of countries. The Nihle is eleven countries, the Niz nine countries, the Vault has six. So countries are interconnected. They are
upstream and sometimes upstream and downstream or only downstream. It is extremely complex and all the time very specific situations, so we cannot transpose one agreement to another. It's not possible.
And stick with me, Olivia.
We're going to take a quick break and when we come back, we'll hear more about some of the challenges around water diplomacy across the continent.
We'll be right back, Welcome back. Today.
We are looking at the role water is playing in Pan African diplomacy. We have Olivier Coajels still with me now, Olivia. We saw with the JR. Dam, the Grand Ethiopian Renaissance to them some of the complications that come with multiple countries being along one certain water base. How do you get to and address the confluence of issues that everyone sort of brings to the table.
Yeah, it's a huge, enormous challenge and only very small, limited basins have succeeded to do it very well. And the most successful example is the sending out river basin. And that's the philosophy, and that's the approach that everybody should have. It's saying heads of states come together and they are aware that alone they cannot solve the water crisis, they cannot fight against drought alone, et cetera, et cetera.
And when they have this conviction. Then they sit down and they say, okay, let's work together, and then they co invest, they go, they borrow together, they invest, they operate their dams together. They even shed sometimes the ownership of the dams. But that is very rare most of the time, and that is why it's not working. Cooperation over water in trans boundary river basins, it's not working well. It's very weak. Agreements are weak, institutions are poor, they
have no money, they have no staff. It's very because there are many issues we can talk about.
It, yeah, please please.
The main thing is about sovereignty and this is why it is so difficult. Of course, now the pressure is so great on population growth is so enormous in Africa. Just take that one as probably the main driver of everything. It's just remind that when I was born in nineteen fifty, there were two hundred and fifty million Africans two hundred and fifty in Sub Saharan Africa, and I hope I will die before twenty fifty and there will be two billion,
five hundred Africans. They have to share the same amount of water, you can imagine. So that's why every country we has a big pressure from insight to develop and economically they are more powerful now and they have more money so they can develop dams and borrow money from even now Asian countries, China, whatever. The issue is that yes, as we country wants to build the dams for their
own people. It's about national interest above all. And you know about the sovereignty in issue in Africa now which is growing everywhere. That is the main issue. Well, whatever you are a rich country in terms of dams, in terms of water, you may be in Aia with a lot of water, or you Ethiopia with a lot of water as compared to Egypt with has nothing. Whatever the
situation you want. The main reaction of every government for electoral reasons is to have unilateral decisions and to promise food self sufficiency and these kinds of things and electricity production, hyperpower development. So infrastructure is booming and that is because, yeah, the demand is booming because population and economy, development and urbanization and so on. Overcoming this sovereignty, the willingness of developing national interest first is the main challenge and that's
why River basin organizations. There are so many agreements have been signed, but very general, very very basic, like saying we may not harm each other. Okay, but what does it mean exactly? We have to have equitable use. Yes, okay, we all signed that, but what is the quitable So you see the issue is that the agreements are too weak and a week because the political willingness to do things together is not there. It's not there in most cases.
You have exceptions, but in most cases it is not still there.
And I wonder if a model like what we are seeing with the Sutuo in South Africa potentially then can work for others. You know, you're mentioning sort of the disparity between some of these resource rich countries like Lasutu has plenty of water, South Africa is struggling with its own water issues. Maybe they balance each other out in terms of Lisuto is now able to leverage that resource
right in order to build up its own economy. So it could be a win win situation, right or do you think that ultimately they are going to be winners and losers across the board.
It's much more complex. Then you cannot go generalized South Africa. That's that's more like a resource you take, you put in the pipe and you send to another country and you sell it. It's never like this elsewhere elsewhere water is flowing since millions of years through countries, and you cannot sell water which is flowing. How can I would say Boulkina Faso sell its water to Ghana. That doesn't
make sense. It flows, that's it. What happens is that if Bokina is building tens and hundreds of small dams, Ghana will suffer from having less water. And then you have a yeah, you have need to negotiate or you have a dispute. But it is not about okay, you have a lot of water, you can sell it to me. That doesn't work like this. It's about saying, okay, you
have two ways to go. Either we continue inilaterally and then we try to mitigate the disputes and we continue to fight but in a moderate way and do some compromises afterwards. All we plan in advance, we do up and that is my approach. That is my vision is to do everything just upfront and not afterwards when things are cooked. You know, when things are cooked, they are not optimal. Dams are not always on the right place
in the basin. Because we talk about the basin, which is shared by five six seven, ten countries and we have to of course, water is scarce because population is growing, we have to optimize water use and optimizing water use, that doesn't mean that every country has to build dumps whenever wherever it wants. That doesn't make sense physically, economically, politically, etc. So it is a big mess. I think it's funny.
I was listening to President Ramaposa here in South Africa earlier this week and he was talking about the list To Dam project and speaking to exactly what you just said. He said, how are they charging us for water? You know, he was talking in jest, but sort of alluding to what you were just saying there, Olivier, before we let you go. I wonder what is at risk if we
don't see this water diplomacy actually succeeding. You mentioned the population growth, but with other natural resources, we've seen them be a catalyst for conflict. Do you think that is potentially where we're headed or is there potentially an opportunity to get ahead of this before we get to that point.
If there is the political awareness, maybe with the help of the African Union to say okay to heads of states now stop, we cannot continue to work inilaterally and build our dams without communicating always limited communication to the neighbors. And we cannot just continue like this. Let's have it at the highest political level. That's my way of seeing. You need a declaration at heads of state level of
the African Union saying no, we need to coordinate. And my word, my approach, my doctrine, I would say, I call it the doctrine of coordinated investment that is published now is really don't talk about no harm and equitable use. You can do that, but in addition you have to have the commitment of heads of states saying okay, now stop, we cannot go for disputes all over the places in Africa about water. That doesn't make sense, It is not
worth it. Let's discuss really with a vision for the future and have the declaration saying, whatever big dams we build, we do it in a coordinated way, not only the planning but also financing and certainly operation. Because you have cascades of dams and you have to even in the Nile GRD is not the only one. You have a cascade of dams just to us one. You have to
to manage the jointly. The dams may be there, but at least you have also to operate the water releases attat the right time and all these things have to be done. So the keyword is coordination, and my doctrine calls doctrine of coordinated investment upfront and not when the things are cooked.
And thanks again so much to Olivia Cojails and also Andre Pierre do play C for joining us this week. You can read more of our reporting from Lasutu on Bloomberg platforms. Now here's some of the other stories we've
been following across the region this week. With fuel prices surging as much as eighty one percent, African governments are rolling out subsidies and cutting taxes to help cushion households from an increase in energy costs triggered by the US Israeli War on a run and Mozambique repaid about seven hundred million dollars to the International Monetary Fund ahead of schedule and in full, a surprise move that raised questions about its motivations and the status of talks over a
potential new program with the lender. And you can follow these stories across Bloomberg, including the Next African Newsletter. Will put a link to that in the show notes. This program was produced by Adrian Bradley and tiwa Adebayo. Don't forget to follow and review the show wherever you usually get your podcasts, But for now I'm Jennifer Zabastaja.
Thanks, as always for listening.