Egypt's cotton farming sector in steep decline

One Egyptian cotton expert says, "In the 1970s, we used to grow cotton on 2 million feddans, now it has been reduced to 300,000 feddans." (One feddan = 4,200 square metres.)

Reasons?

‘…a marked increase in the cost of farming the commodity, competition from cheaper threads from elsewhere and labour strikes in textile factories.’

As almost everywhere else that cotton farming is in trouble, there is hope that the government will intervene to save the day. It has done so through subsidies for cotton farmers, but with other costs making the country’s cotton uncompetitive, solving the problem is not that simple and straightforward.

Again as almost everywhere else, hard-to-price compete-against fabrics from China are a big issue for Egypt’s textile sector in general, and its cotton farmers in particular.

More…

Unrest in Egypt may be spurred by greater dependence on grain imports from US, reduced farmer viability

Why does there appear to be so much widespread pent up rage against the US in the Arab world, even in country considered a long time friend like Egypt?

Political analysts of all shades are groping for answers to this question, with the range of answers as varied as the people who give them. Unfortunately and typically of 'the international media,' not many think to simply ask the Egyptians and other Arabs themselves!

Thomas Kostigen has an interesting take on the issue.  In his article 'Behind Arab riots lie U.S. agricultural policies, he argues part of the antipathy is due to "U.S. policies that disrupt people’s lives and darken rays of hope."

Writes Kostigen,  "The backlash by the Muslim segment of the Arab world goes deeper than one recent, hateful film; it goes back to 1992 when small farmers in Egypt lost their land rights under a reform scheme implemented by former President Hosni Mubarak."

Kostigen cites an article he wrote at the start of Egypt's 2011 anti-Mubarak upheavals, and long before the present protests initially attributed by some to anger over a crude anti-Islamic film.

In the earlier article, Why U.S. farm policy caused Egypt crisis,
Kostigen said under U.S. and International Monetary Fund pressure, "the country’s small farmers who were ‘registered tenants’ became subject to rent increases, in many cases triple what they had been paying. As expected, these small farmers couldn’t afford the steep rent increases and were forced off their land. More than half of all Egyptians live in the countryside, and millions were forced into poverty. Moreover, Egypt itself became more reliant on imports."

Kostigen points out a great deal of those imports that have made many farmers destitute come from the United States. The fact that U.S. wheat and other grain farmers enjoy subsidies that make it that much harder for Egyptian and other world farmers to survive, let alone compete, may have just fueled resentments, suggests Kostigen.

Quips Kostigen, "It’s a great thing to provide food at cheap prices to people. But once a population is hooked on cheap food and then prices rise, as they have to their all-time highs, a shift in mood should be expected."

Some will find it easy to reject Kostigen's contentions as a rant against his country, but he provides the kind perspectives on real-world issues affecting people in country's like Egypt that more prominent political talking heads are completely oblivious of.

U.S. president Barack Obama recently announced a grand initiative to help kick-start agriculture in several African countries. It will be significantly private sector driven.

The Egyptian example given by Kostigen is just one of many reasons some agriculturally-engaged people in Africa are suspicious and worried about the 'help' the U.S. proposes to give for African agriculture. Will it be 'help' to African farmers become more productive and competitive, or will it be actually help to American agricultural corporations to create and find new markets at the expense of African farmers, as Kostigen claims has been the case in Egypt?

In agrarian societies, issues like those pointed out by Kostigen are matters of life and death for millions of people. The damage to livelihoods and resentment over them cannot be compensated by then donating military or other aid to the ruling classes.    

Kostigen provides deep, well written and very readable perspectives on some little known but important contributors to Egyptian's love-hate relationship with the U.S. Too bad it is almost entirely predictable that politicians and government bureaucrats in Washington D.C. will pay little or no heed of the warnings of people like Kostigen that the issues and feelings go far deeper than anger over an anti-Islam film.

African Agriculture

Nile River row: Could it turn violent?

The giggles started when the seventh journalist in a row said that his question was for Egypt’s water and irrigation minister, Mohamed Nasreddin Allam.
The non-Egyptian media gave him a bit of a hammering at last week’s talks in Addis Ababa for the nine countries that the Nile passes through.

Allam bared his teeth when a Kenyan journalist accused him of hiding behind “colonial-era treaties” giving his country the brunt of the river’s vital waters whether that hurt the poorer upstream countries or not, Reuters reports.

“You obviously don’t know enough about this subject to be asking questions about it,” he snapped before later apologising to her with a kiss on the cheek.

Five of the nine Nile countries — Ethiopia, Uganda, Tanzania, Rwanda and Kenya — last month signed a deal to share the water that is a crucial resource for all of them. But Egypt and Sudan, who are entitled to most of the water and can veto upstream dams under a 1929 British-brokered agreement, refused.

The Democratic Republic of the Congo and Burundi have not signed yet either and analysts are divided on whether they will or not. Six Nile countries must sign the agreement for it to have any power but Egypt says even that wouldn’t change its mind. The five signatories — some of the world’s poorest countries — have left the agreement open for debating and possible signing for up to a year.

Tensions were clearly still running high after two days of negotiations in Addis and despite grinning around the table and constantly referring to each other as “my brother”, the ministers always seemed in danger of breaking into bickering.

When the Sudanese water minister said his country was freezing cooperation with the Nile Basin Initiative — the name given to the ten-year effort to agree on how to manage the river — Ethiopia’s water minister loudly protested to the media that his Sudanese colleague had not revealed that during their private meetings.

Highlighting the seriousness of the issue, Egyptian Foreign Minister Ahmed Abul Gheit and International Cooperation Minister Fayza Abul Naga, arrived in Addis Ababaon Wednesday to again meet Ethiopian Prime Minister Meles Zenawi.

It’s no surprise that the spat is getting a lot of press in both Ethiopia and Egypt.

“Egypt is a gift of the Nile,” people like to say in a country that worshipped the river as a God in ancient times. “If Egypt is a gift of the Nile, then the Nile is a gift of Ethiopia,” Ethiopians shoot back with growing confidence.

And they have a point. More than 85 percent of the waters originate in Ethiopia, which relies on foreign aid for survival and sees hydropower dams as a potential cash cow and central to its plans to become one of Africa’s only power exporters.

But Egypt is not for turning. Almost totally dependent on the Nile for its agricultural output (a third of its economy) and already worried about climate change, it is determined to hold onto its 55.5 billion cubic metres of water a year, a seemingly unfair share of the Nile’s total flow of 84 billion cubic metres.

The Egyptians point out that they don’t benefit from rains like the upstream countries. Everybody, it seems, has valid points. Nobody is budging. Now some regional analysts are even saying the row could turn into the world’s first major water war and similar thoughts are being expressed in cafes from Cairo all the way upriver to Dar es Salaam.

So what next? The nine countries are due to meet again in Nairobi sometime between September and November. But where is the way forward? Who will blink first? And who really should? Could this bickering turn violent?

Reuters 

Billions lost as EU rejects Egypt's agricultural products over E.coli concerns

The European Union said on July 25 that they would not accept any Egyptian agricultural products into the continent. The move will cost Egypt an estimated 25 million pounds ($4.2 billion), and has the government frustrated as it attempts to put the country’s economy back on track following a January revolution that ousted the former regime.

... exporters and farmers announced they will respond to the move by protesting in front of the European Union’s headquarters in Cairo.

The move comes on the heels of an outbreak of E. coli in Europe, which the continent’s agricultural experts say originated in Egyptian fenugreek seeds.

In response, the EU earlier this month banned all seed imports from Egypt into Europe, but has now moved to forbid all agricultural products from the North African country.

The measure ignores both Egyptian and European tests which proved that the Egyptian fenugreek seeds were safe and free from E. coli bacteria.

The agriculture ministry told the European mission in Egypt that it was surprised at the measure adopted by the EU...

According to the state-run MENA news agency, the ministry received earlier this month a letter from the European Commission approving the safety of the Egyptian fenugreek.

The E. coli outbreak has killed over 50 people in Europe since it was first reported in late May.

Russia’s food safety watchdog Rospotrebnadzor has also banned the import of certain types of produce from Egypt over food safety concerns, a Russian official said.

Egypt’s ministry of agriculture has repeatedly refuted the claims of the E. coli source being Egypt.

Egypt Daily News

To Egypt's chagrin, Burundi joins controversial Nile Basin pact

by Ahmed Zaki Osman


Burundi has officially joined several fellow upstream countries in an alternative Nile Basin initiative, allowing the pact to come into force without Egypt’s approval.

Tensions in the Nile Basin between upstream and downstream countries have long been a key diplomatic issue for Egypt.

Six upstream countries have so far signed on to the Entebbe-based Nile Basin Initiative (NBI), which will establish the Nile Basin Commission, a body mandated with deciding on river projects in basin countries.

“Burundi took advantage of recent political turmoil in Egypt and hurried to sign the initiative. It knows that Cairo has its hands full with domestic issues after the removal of [former president Hosni] Mubarak,” said Amany al-Taweel, an expert in African affairs at the semi-official Al-Ahram Center for Political and Strategic Studies.

After 18 days of massive protests, sit-ins, marches and civil disobedience, Mubarak was forced on 11 February to leave the office he had occupied for 30 years.

In November, after a meeting with Mubarak, Burundian Presidential Adviser Mohammad Rokara had said that his country would “never take a position that conflicted with Egypt's interests.”

Egypt's population of some 85 million draws about 90 percent of its water needs from the Nile. Officials, for their part, warn that the alternative water agreement would be unable to provide Egypt’s growing population with its water needs beyond 2017.

Critics have often blamed Egypt’s ousted president for ignoring Africa and for failing to deepen Egypt’s strategic ties with the states of the Nile Basin.

Experts also blast Egyptian foreign policy for being slow to deal with perceived threats to the strategically-important river. They accuse it of encouraging Nile Basin countries to seek alternatives to the historical agreements that have regulated usage of Nile water resources for most of the last century.

“Egyptian diplomats go everywhere except Africa. Mubarak was always in Sharm El-Sheikh while his foreign minister [Ahmed Abul Gheit] was touring Europe. There was no interest whatsoever in the African continent,” said columnist and pan-Arab political activist Ahmed al-Gamal.

“It’s time to reconsider Africa as a priority in our foreign policy. We can provide technical assistance for electricity projects and farming expertise on the basis that we are equal. There shouldn’t be a sense of Egyptian superiority,” added al-Gamal.

Hussein al-Otaify, Egypt’s newly-appointed minister of irrigation and water resources, held an urgent meeting with other concerned state bodies. Al-Otaify has said his ministry would draft an “urgent plan of action” in order to deal with the Nile issue, stressing that Egypt planned to take part in several bilateral projects with Nile Basin countries while calling on upstream states to preserve “Egypt’s historical rights in the Nile.”

Last year, after a decade of talks, four upstream basin countries--Uganda, Rwanda, Tanzania and Ethiopia--signed a pact allowing for what they said was a more equitable use of Nile water.

Under the Cooperative Framework Agreement, Ethiopia intends to build dams and export power to neighboring countries, while also establishing a host of irrigation projects.

Egypt and Sudan, both of which condemned the pact, have argued that their respective water supplies would be dangerously reduced if upstream countries were allowed to divert the flow of the river without multilateral consultation.

Egypt says that all Nile Basin countries must approve any initiatives involving the river to ensure that its traditional share remains unaffected, in accordance with international treaties signed in 1929 and 1959.

In 1929, imperial Britain, representing a number of Nile Basin countries, signed a deal with the Egyptian government for the distribution of Nile water. The terms of the treaty granted Egypt 55.5 billion square meters of water annually, out of the estimated 84 billion square meters that flow through Sudan every year.

East African countries have long complained about the negative effects of the colonial-era 1929 treaty, which allows Egypt to veto any irrigation or hydro-power projects proposed by upstream countries.

Under a 1959 Nile water agreement with Sudan, Egypt receives the lion's share of Nile water. Sudan, the next largest recipient, is allotted 18 billion cubic meters per year. This means that the two downstream countries account for more than 90 percent of all Nile water.

Such agreements have effectively given Egypt veto rights over all upstream projects.

“Egypt has applied a strategy that puts emphasis on the authority and validity of the traditional treaties of 1929 and 1959,” said al-Taweel.

Egyptian experts argue that disputes between Egypt and Nile Basin countries are of a "technical" rather than “political” nature. They assert that there is more than enough Nile water for all countries of the Nile Basin.

“The foreign policy of post-Mubarak Egypt will not abandon the strategy of commitment to the traditional treaties, but Cairo will show more interest in cooperating--economically and strategically--with other Nile Basin states,” al-Taweel said.

While upstream nations have refused to change the newly signed Cooperative Framework Agreement as per Cairo’s requests, the NBI scheduled an extraordinary meeting in January aimed at changing Egypt’s mind about the accord.

The meeting, however, was cancelled due to Egypt’s popular uprising, but is now slated to take place in Nairobi later this month.

Moreover, an African summit on Nile water usage, originally scheduled to be held in the Ugandan capital of Kampala in January, was also cancelled as a result of recent political turbulence.

www.almasryalyoum.com

Egypt threatened to use force over threats to Nile waters - Wikileaks

by Jeff Otieno

The government of the ousted Egyptian strongman, Hosni Mubarak, at one time considered the use of force if upstream countries threatened its historical rights to the use of the Nile waters.

The administration was incensed by riparian states insistence on using the Nile for irrigation and other water consuming projects.

According to confidential cables sent to Washington by American diplomats based in Cairo, the Mubarak administration viewed access to its quota of Nile waters as a national security issue, “and a creation of a system that threatens this quota will be seen as an existential threat.”

The documents, written in 2009 and released by the whistleblowing website WikiLeaks, said Egypt felt its existence as a nation was under threat, following the failure of upstream countries to guarantee access to 55.5 billion cubic metres of water annually.

“Upstream countries led by Kenya, Tanzania, and Uganda argued that climate change has changed the circumstances, making it difficult to rely on rain-fed agriculture, and they need to use Nile water for agriculture, power, fisheries and other water-dependent industries necessary for their security,” said one of the cables sent by the US embassy in Cairo.

Egypt, however, with some support from Sudan, maintained that downstream countries must approve any water use by upstream countries that could reduce their “guaranteed quotas” and threaten their existence.

The use of the Nile, the world’s longest river, has in the recent past become controversial with analysts warning that it might be a potential for water wars is not carefully handled.

The Nile is an important resource for millions of people in East, Central and North Africa.

It has improved food security through fishing and farming, helped many access electricity generated by hydropower plants and contributed to the growth of agro-based industries, employing millions of people.

The major dams on the Nile are Roseires Dam, Sennar Dam, Aswan High Dam, and Owen Falls Dam.

The Nile Basin Initiative was established in 1999, by riparian states to promote co-operation and equitable use of the waters.

The members are Burundi, D.R Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda.

All the upstream countries, except Burundi and D.R Congo, have already signed the Nile Basin Draft Agreement, which has been contested by Egypt and Sudan.

If the two upstream countries sign the document, this year, it will pave the way for ratification of a pact that strips Egypt of its veto powers to the flow of the Nile.

Egypt pointed fingers at Kenya and Tanzania for being vocal about using Nile water for development “and have made domestic political promises to do so.”

“According to Khalil, Kenya accused Egypt of taking Lake Victoria water to cultivate two million acres of food in Uganda. Metawie stated that diminishing water levels are as a result of Uganda releasing water for power generation, not agricultural cultivation,” says one of the documents.

The destiny of the new Egypt is to become the lion of Africa

Both Rafik Khalil and Fattah Metawie, were part of the delegation dispatched to negotiate with the other riparian states on the use of the resource.

The delegation insisted that attempts by the upstream states to set up a Nile River Basin Commission laid ground for “abuse of Nile Waters” and violated the spirit of “consensus.”

The East African

Burundi signs accord on use of Nile River water

by David Malingha Doya

Burundi became the sixth nation to sign an agreement on water usage from the Nile River, enabling ratification of an accord that may strip Egypt of its veto power over rights to the flow from the world’s longest river.

“The government of Burundi sent an e-mail to technical advisory committee members confirming they have signed and asked us to join them in congratulating them upon this landmark achievement,” said Shillingi Mugisha, a member of the Nile Technical Advisory Committee.

A 1929 treaty brokered by the former colonial power, Britain, granted Egypt a veto over projects that may alter the flow of the Nile. A 1959 accord between Egypt and Sudan claimed 90 percent of the Nile’s flow for the two countries.

The so- called Cooperative Framework Agreement, signed by Ethiopia, Rwanda, Tanzania, Uganda and Kenya in May, will establish a commission to oversee dam building and irrigation development, effectively stripping Egypt of the veto. Almost all of Egypt’s water supply comes from the Nile.

“We are happy to join our colleagues in East Africa in signing this agreement,” Burundian Water and Environment Minister Jean-Marie Nibirantije said in a phone interview today from Bujumbura, the Burundian capital.

Egypt warned in April, before the five countries signed the accord, that it would withdraw from the Nile Basin Initiative, a nine-member convention on cooperation in the Nile basin known as the NBI, if the seven upstream states signed the accord.

A sixth signatory was needed for the CFA to come into force and once it has been ratified by the six national legislatures, a Nile Basin Commission will be created. The remaining upstream nation, Eritrea, wasn’t involved in talks leading to the accord. The CFA states that the commission will resolve the issue of water security in its first six months of operations.

Abdel Fattah Metawie, head of the unit responsible for Nile water in the Egyptian Ministry of Water Resources and Irrigation, didn’t respond to e-mailed questions sent today seeking comment. Egypt and Sudan in January asked Nile basin countries to meet to discuss the legal implications of not all riparian states signing the agreement.

“The meeting was postponed because of the political problem in Egypt, but could take place next month,” Ethiopian Water and Energy Minister Alemayehu Tegenu said in a Feb. 22 interview from Goma, in eastern Congo.

The Democratic Republic of Congo, which led a campaign for countries to sign the agreement in 2009, plans to sign the accord at an unspecified future date, Environment Minister Jose Endundo said in an interview on Feb. 22.

Some projects being considered on the Nile include a 60 to 80-megawatt hydropower plant at Rusumo Falls to serve Rwanda, Tanzania and Burundi, according to information from NBI. Building the power-generation plant and cross-border transmission lines over the next four years may cost $350 million, it said.

“For the actual investment projects like irrigation schemes, watershed management, electricity generation and transmission, we estimated the cost at $784 million in 2010,” Khairy Wael, executive director of the NBI, said in a Feb. 22 interview from Goma. “We forecast investment to be $2.4 billion by 2014.”

The Nile River’s average discharge is about 300 million cubic meters per day, according to the website of the Nile Basin Initiative. Ethiopia is the source of about 85 percent of the water that flows to Sudan and Egypt.

“It’s big news for us,” Ethiopian Foreign Ministry spokesman Dina Mufti said by phone today from Debre Zeit, Ethiopia. “We think this is in the interests of Burundi and all riparian countries. We believe it’s even in the interests of Egypt, as this is the only way we can be in a win-win situation.”

Bloomberg

South African farmers shun Libya investment; target Sudan, Egypt

by Brian Latham

 South Africa’s biggest farmers union, Agri SA, said its members are seeking to expand into Egypt, Morocco and Sudan while putting plans to enter Libya on hold because of violence in that country.

Members of the Pretoria-based union are already producing grapes in Egypt’s Aswan region and are considering olive farming and processing ventures in Morocco and sugar and banana operations in Sudan, Theo de Jager, who heads the union’s Africa committee, said in an interview. An agreement to farm land in Congo Republic has already been brokered and sugar operations are being considered in Mozambique, he said.

The union, which has 70,000 members, is hoping to profit from growing demand in Africa and to compete more effectively on the international market by investing in countries where the climate and location may help them undercut rivals in South America.

“We hope to end the competitive advantage they have over us,” de Jager said from Tzaneen, a fruit-farming town in eastern South Africa. Expansion into Libya has been “put on the back burner” by farmers who had hoped to profit from a yet to be ratified bilateral trade agreement between the country and South Africa, he said.

Most farmers will have the operations in new countries run by managers rather than emigrating, he said.

“There are South Africans opening up in Egypt, with one of our biggest grape farmers and others farming in the Aswan region,” De Jager said. “The farmers in northern Sudan should be able to utilize a preferential sugar trade agreement between Arab nations.”

Investment plans in Congo Republic, where the agriculture ministry will allocate about 172,000 hectares (425,012 acres) of land to 17 South African farming syndicates, are focused on producing grain and red meat for the local market and fruit for export.

“The farmers will grow tropical fruit and hopefully give us an edge against farmers in South America where they traditionally beat us to the European markets by about a week,” he said.

The union hopes to soon conclude talks over 50-year land leases in Mozambique week as part of a plan to grow sugar for biofuel plants, tropical fruit and livestock, de Jager said.

The union has turned down opportunities in Canada and Europe, he said.

A rival union, Tau SA, has concluded an agreement to send farmers who want to leave South Africa to Georgia.

South African farmers are the continent’s biggest producers of corn, grapes, wine and sugar and the world’s second-biggest citrus fruit exporter after Spain.

Businessweek

Egypt to receive $ 100 m World Bank loan to modernize irrigation

The World Bank approved December 23 a $100 million loan to support Egypt’s Farm-level Irrigation Modernization Project (FIMP), according to a statement.

The project aims to increase agricultural profitability and improve access to higher-quality water for around 140,000 small-scale farmers on 200,000 feddans in Mahmoudia, Manaifa and Meet Yazid, located in the Nile Delta, the statement read.

“This project represents an important step in improving the efficiency of irrigation water use in the Nile delta," said A. David Craig, the World Bank’s country director for Egypt, Yemen and Djibouti. The bank’s objectives in the agriculture and irrigation sector aims to support the government’s efforts to improve the management and efficiency of the use of land and water resources," he added.

According to the World Bank, while its contribution to GDP is falling, Egypt’s agriculture sector employs 30 percent of the workforce and supports 55 percent of the population.

The first component of the project supports “marwa (farm-level ditches) and farm-level irrigation modernization” in the selected areas, “where branch canal and mesqa (tertiary channels that receive water from branch canals) improvements have been carried out or are currently ongoing.”

The second component aims to raise awareness among farmers on the latest land improvement and crop production technologies.

In line with Egypt’s Strategy of Sustainable Agricultural Development 2030, part of a longer-term national program to modernize irrigation on 5 million feddans, "the project includes a new approach to the delivery of services by the Ministry of Agriculture and Land Reclamation that is based on working with farmer's groups on participatory planning and project implementation," said Julian Lampietti, the World Bank Project Task Team leader.

Hani El Sadani, the World Bank Project co-Task Team leader, said that it will also “contribute to the development of the local private sector through the local contracting of services and works to upgrade the power grid and modernize the on-farm irrigation systems.”

In March, the World Bank approved a loan worth $30 million for Egypt’s Second National Drainage Project.

Also on December 23, the World Bank approved a $330 million loan for Egypt’s railways project, which will be used to finance the modernization of signaling along the Beni Suef-Assiutline, between Alexandria-Assiut.

Daily News Egypt





https://www.arabfinance.com/news/newsdetails.aspx?id=184339

Afreximbank increases lending to African firms involved in agriculture

by Shaimaa Fayed

Egypt-based African Export Import Bank (Afreximbank) aims to boost its assets by 10 percent in 2010 to $1.6 billion with increased lending to African firms involved in agriculture, the bank's president said.

Jean-Louis Ekra said agriculture in Africa was being given a boost because of global concerns about food security that was pushing investment into the sector, and cited opportunities in countries such as Malawi. He also said business risks in Africa were often overstated by investors, and said he expected sturdy growth given the continent's 1 billion people, foreign exchange reserves in excess of $450 billion and agricultural potential.

"Historical data will show that less than 1 percent of the money that they (banks) lent in Africa was lost," he said. "More than 60 percent of the arable land of the world is here on our continent. The biggest challenge of the future ... is food, access to water. This continent has it. What is left for us is to turn this potential into reality," he said. "We've been doing more for certain countries like Malawi and doing more in certain items like fertilizers ... because the food crisis has made many more countries more interested in developing the agricultural sector," Ekra said in an interview.

Other sectors being eyed by the bank, which finances and promotes trade within and beyond Africa, include oil and telecoms, he said.

Trade finance experts have said the difficulty some poor African nations have in obtaining funding for their exports threatens their economic development.

"We still are not fully out of the so called financial crisis. It's very difficult for companies and for even banks to have access to the amount of funding that they want," he said, adding that his bank was seeking to help fill the gap.

Africa's trade in 2009 was around $900 billion, divided almost equally between imports and exports, Ekra said, adding that growth in trade was stalled by the private sector's lag in pushing for greater involvement in trade agreements.

"The private sector should as a bloc say 'look, we are not prepared to accept that (governments) go and sign an agreement that is not beneficial for us,'" he said, adding African trade delegations were often dominated by politicians not executives.

Reflecting growing appetite for African investments, he pointed to Afreximbank's $300 million five-year bond launched in Nov 2009 at a 9.125 percent yield, which was over five times oversubscribed.

Afreximbank, established in 1993, has authorized capital of $750 million. The bank's non-performing loan ratio averaged about 1 percent between 2004 and 2009, a statement from the bank said.

Its shareholders include African governments and private investors, and non-African financial institutions and its Egyptian clients include El Sewedy Cables, the largest Arab cable maker by market value, which supplies cables to various African countries.

Ekra said the biggest challenge facing African trade was the need to diversify exports beyond raw commodities such as cocoa to offset demand and price fluctuations on the global market.

Reuters

Egypt eyes Sudan for land to grow wheat

Egypt has turned to its southern neighbor, Sudan, for use of agricultural land as the world's largest wheat importer looks to meet domestic food supply needs and quell a rapidly growing population increasingly irate about chronic price increases.

With a summer drought in Russia that propelled world grain prices higher still fresh in the government's mind, Egyptian officials in September revived a 30-year-old agreement with Sudan that encourages private companies to plant wheat in northern Sudan. The deal brings Egypt into a growing list of Arab nations that have turned to Africa as a new breadbasket.

"We are facing a shortage of agricultural commodities internationally," said Ayman Abou Hadid, chairman of the state-run Agricultural Research Center. Under the deal, the Egyptian government provides investors with incentives for irrigation and infrastructure, but production is left up to the private companies, he said.

"The government is not going to participate," said Abou Hadid.

The deal marks the latest attempt by the government to meet future needs in the Arab world's most populous nation. But the push has clear political overtones. An unusually hot summer in Egypt led to a sharp increase in vegetable prices — though those gains were linked in part to a decision by the government to export tomatoes, leaving the local market short.

Fears about increases in food prices had already taken root even before Russia decided to halt grain exports for the rest of the year after a summer drought killed off a third of its annual harvest. Over the course of the year, meat prices seesawed, more than doubling before retreating slightly. Similar gains were seen in more basic goods, as well, leading to a series of protests that came at a particularly critical time for the government of President Hosni Mubarak, who has ruled the country for the past 30 years. With parliamentary elections set to be held at the end of November and presidential elections slated for next year, Egyptians have increasingly complained about the government's failure to improve living standards, raise salaries or provide basic services.

In 2008, shortages in subsidized bread lead to fights that left eight dead. In 1977, an attempt to end such subsidies led to riots that required army intervention.

While the latest protests are unlikely to seriously threaten Mubarak's, or his ruling National Democratic Party's, hold on power, they highlight a widening schism between rich and poor in the key U.S. ally and increasingly vocal protests about the economic situation in the country. Critics argue that the country's economic growth has largely failed to trickle down to much of the population, with 40 percent of the people living on or near the World Bank poverty line of under $2 per day.

The deal also provides a potential boon for Egypt, which remains at odds with several other nations that share the Nile River, over water quotas. Abu Hadid said water used to irrigate wheat crops in Sudan would come from that nation's allotment, not Egypt's.

The new production would likely be just enough to meet Egypt's rate of population growth, said Abdolreza Abbassian, a senior economist at the United Nations' Food and Agriculture Organization.

It could also provide a sorely needed cash infusion for Sudan's struggling economy, which has been ravaged by the country's a 21-year civil war between Sudan's mostly Muslim north and predominantly animist and Christian south.

"Sudan has a huge potential," he said. "There are so many positive aspects as long as some code of conduct is respected."

Egypt is not alone in tapping Sudan's vast land base for crops. Saudi Arabia, the United Arab Emirates and Qatar have also turned to the country for food.

Some experts argue, however, that the deal will do little for Sudan, which has its own food worries, along with political problems.

Nader Noureddin, a soil and water expert at Cairo University's College of Agriculture, said wheat production in Sudan's northern desert would require tremendous amounts of water and would do little to supplement the country's own domestic need for the grain.

"They need it (wheat) much more than Egypt," he said. "This is their own land."

Additionally, any private Egyptian investment will not help Sudanese farmers because the companies that venture in will be looking at profit, not whether the war-ravaged nation can feed itself, said Noureddin.

The criticism is dismissed by officials, however, who argue that the new wheat production will be traded on the open market and foreign investment will help improve infrastructure.

"Any African country that can afford to grow more food, that is better for everyone," said Abou Hadid.


Associated Press

Egypt seeking to grow cereals on African farmland

The Egyptian government is hoping to cultivate wheat and other cereals on fertile land in African countries to feed its growing population of over 80 million.

In early September it signed a deal with the Sudanese government to give Egyptian companies access to Sudanese farmland.

“Growing essential crops like wheat in other water-rich African countries where fertile land is in abundance is an important solution,” said Ayman Farid Abu Hadid, chairman of the state-run Agricultural Research Centre, which signed the deal on behalf of the Egyptian government. “Cultivating wheat in other African countries will reduce the cost of imports.”

According to some estimates, Egypt consumes about 14 million tons of wheat annually, but produces only 60 percent of that. The Egyptian wheat subsidy system has been coming under strain in recent months and Egypt has been further affected by the Russian wheat export ban: it used to be a major importer of Russian wheat.

The government said in August it had plans to achieve 70 percent self-sufficiency in wheat by 2017. Agriculture Minister Amin Abaza said for Egypt to produce enough wheat to feed its population, it needed to increase the area planted to about 2.1 million hectares - from 1.26 million hectares at present.

The UN Food and Agriculture Organization (FAO) has previously warned of the effects of rising wheat prices on budgets in North African countries.

Abdolreza Abbassian, FAO’s senior economist, said in countries where governments depended on bread subsidies to prevent social unrest, declining wheat output and increasing prices could have serious ramifications.

“Some are politically unstable countries, and they simply cannot afford social unrest due to costlier bread,” said Abbassian. “Wheat is a large part of the diet. It would greatly impact the urban poor, so they will be very careful,” he told the media in August.

The Egyptian private sector, which in the case of Sudan will be allowed to cultivate 420,000 hectares, will take the lead in boosting cereal farming in other African countries.

Saad Nassar, an adviser to the Egyptian agriculture minister, said the deal would allow Egyptian companies to grow a variety of crops in Sudan’s well-irrigated Al-Gezira region south of Khartoum, and that the Egyptian government’s role would be restricted to offering the necessary technical assistance.

Egyptian officials say African and Nile basin countries, such as Uganda, Rwanda, Kenya, and Ethiopia, are high on a government list as potential places in which to make agricultural investments. They add that, apart from strengthening links with these African countries, the move would help Egypt avoid depending on its limited water resources.

“Water scarcity is Egypt’s main hindrance to even coming close to food self-sufficiency,” said Abdel Salam Gomaa, a leading agricultural expert. “It is a fact that stifles every attempt to attain self-sufficiency.”

A recent market report says Egypt would need 86 billion cubic metres of water annually by 2017 (up from the 55 billion it currently gets from the Nile), but a recent government-commissioned report said Egypt would only gain access to 70 billion cubic metres of water annually by then.

Although they enthusiastically support the government initiative, Gomaa and like-minded experts warn against depending too heavily on the generosity of other African countries when it comes to water.

Any moves, they say, might confirm the worst fears of decision-makers in Nile basin countries that Egypt is out to grab as much water as it can for itself. “This is a real dilemma,” Gomaa said. “These countries are so sensitive to any talk about their share of the water of the Nile, particularly when it comes to Egypt.”

Several upstream countries recently began lobbying for a redistribution of water from the Nile. These countries say two colonial era agreements - signed in 1929 and 1959 - unjustly give Egypt and Sudan too much water, leaving their own populations high and dry.


IRIN

Egypt asserts right to block upstream Nile dams

by Dina Zayed

Egypt insisted on May 18 it can block dams and other projects upstream on the Nile, challenging a new deal among African nations seeking to alter historic water sharing arrangements and secure more water for farms and growth.

Four African countries signed the agreement in Uganda the week before in a bid to access a greater share of water from the Nile, despite colonial-era pacts that give Egypt the lion's share of the water and allow it to veto upstream projects such as dams.

"Any project that takes away from the river's flow has to be approved by Egypt and Sudan in accordance with international treaties," Egypt's Water Resources and Irrigation Minister Mohamed Nasreddin Allam said.
"Egypt is closely watching energy generation projects in the (Nile) basin," he said.

Tanzania, Uganda, Rwanda and Ethiopia signed the deal on May 14, creating a permanent commission to manage the Nile's waters that did not include Egypt or Sudan. Kenya, Burundi and Democratic Republic of Congo are expected to sign within a year. The new commission would ostensibly have the power to veto energy and irrigation projects in signatory states.

Egypt, almost totally dependent on the Nile and already threatened by climate change, is closely watching hydro-electric dams in East Africa it fears may restrict the river's flow. Egypt has already warned that the new agreement lacked legitimacy and plans to press donors for support.

Yet upstream countries say they need more water too. Power shortages have hindered investment in Africa even though alternative sources to hydroelectric power exist.

The day the pact was signed, Ethiopia inaugurated its Beles Dam, which it says will produce 460 megawatts.

After the inauguration, Egyptian media voiced concern the project could reduce the flow of water to Egypt. Some 85 percent of the Nile's waters originate in Ethiopia.

Allam said Egypt had no objections to dams or other energy projects upstream on the world's longest river as long as the country's share of 55.5 billion cubic metres was not reduced.

Analysts say global donors and banks may be reluctant to finance projects that would harm Egypt's and Sudan's access to water for fear of getting entangled in a regional spat.

Egypt is widely credited with having blocked a loan from the African Development Bank for a dam project in Ethiopia in 1990.

"Most donors see that consensus between Nile Basin countries and the consent of Egypt as key to funding any project," said Gamal Soltan of the Al-Ahram Centre for Political and Strategic Studies. "Egypt could work with these international donors."

One state newspaper quoted Egypt's Prime Minister Ahmed Nazif on Tuesday as saying: "Signing a unilateral treaty confirms that the motivation behind it was political, so it shall be dealt will politically."

Ethiopia, which rationed power for five months in 2009, when outages every second day closed factories, hampered exports and fuelled a currency shortage, says a new pact could help boost energy projects and shore up investment.

"Egypt is not trying to undermine development projects ... but it is trying to push for projects that could serve the interests of all those states and Egypt itself," Soltan said.

Reuters

Ten years of talks - and still no resolution to Nile controversy

Contrary to the controversy it has engendered, the Nile river agreement should allow for more equitable water use and minimize potential conflicts between the riparian states, says an analyst.

"The problem with the River Nile is lack of cooperation in water management," Debay Tadesse, senior researcher at the Institute for Security Studies (ISS) in Addis Ababa, said. "There is enough [water] for all the riparian states and this agreement opens the way for more equitable management."

The 14 May Nile River Basin Cooperative Framework was signed by Ethiopia, Rwanda, Tanzania and Uganda, but was left open for a year. It followed a meeting of water ministers in Sharm El-Sheikh, Egypt, where Burundi, Democratic Republic of Congo, Ethiopia, Kenya, Rwanda, Tanzania and Uganda agreed to it.

Egypt and Sudan have rejected it, saying the accord only reflects the views of seven, not nine, states that share the resource. They suggest more talks.

"For Egypt and Sudan, as well as the other eight riparian countries, the question of how much water they can use to irrigate their agricultural land and sustain their growing populations [has] become [an] existential [matter] that dwarf[s] the other political conflicts plaguing the region," Nadia Anne Zahran wrote in The Middle East Channel on 19 May.

On 6 May, the International Crisis Group warned the dispute could polarize the region. It could also harden Egypt’s resolve to maintain the status quo by rallying behind Sudan and against the other countries.

The new agreement, signed in Entebbe, Uganda, after 10 years of talks, also transformed the Nile Basin Initiative into a permanent Nile River Basin Commission and will facilitate its legal recognition in the member countries.

Kenya signed on 19 May. “Nothing now stops us from using the waters as we wish,” Kenya’s Water Minister Charity Ngilu said. “It is now up to Egypt and Sudan to come on board in the spirit of cooperation on the basis of One Nile, One Basin and One Vision. Two states out of nine cannot stop us from implementing this framework.”

For ratification, the agreement now needs to be signed by DRC and Burundi.

"What will underpin the usage of the Nile River resources is equitable and sustainable use in the best interests of all members," a source at the Entebbe talks told IRIN. "The new agreement binds only those members that have signed, which means that unless Egypt and Sudan sign, it does not bind them... [but] the main thrust is to give equal opportunity to all members without anyone claiming 90 percent leverage over the river."

Egypt's current monopoly, he added, was untenable. "This was not acceptable to many members; that is why the new agreement was negotiated," he added. "There is going to be a formula followed while exploiting the river resources. The agreement has not invented anything new, but it codified already existing international law governing waterways."

Egypt has so far stuck to its guns. "Any project that takes away from the river's flow has to be approved by Egypt and Sudan in accordance with international treaties," Reuters quoted Water Resources and Irrigation Minister Mohamed Nasreddin Allam as saying on 18 May. "Egypt is closely watching energy generation projects in the [Nile] basin."

Tadesse said Egypt and Sudan had no option but to negotiate with the other riparian states. "They have one year to decide, but they will have to," he said on 19 May. "They will only be able to monitor what is happening in the Upper Nile riparian states if they sign. Not knowing what is happening in those states would be a threat to Egypt and Sudan. For example, if Ethiopia or Kenya build more dams, Egypt will want to know what is happening."

The Entebbe source said: "Nobody is going to cut off water to countries downstream, but we shall have equal opportunities in its utilization. Disputes will arise and will be resolved through the Nile Basin Commission ... but even when they cannot be resolved at that level, third parties like the International Court of Justice could be resorted to, but I think this will not be necessary."

According to Kithure Kindiki of the School of Law at the University of Nairobi, Kenya, neither the unilateral claims of Egypt on maintaining the status quo on the Nile, nor the threat by upstream states such as Tanzania, Uganda and Kenya to obstruct the Nile-Victoria system are supportable in law.

“The legality of the Nile treaties should be understood from the viewpoint of the principles of international law on state succession as and how that affects treaty obligations,” he noted in a December 2009 paper. “All these treaties, except the 1959 Agreement, were adopted when all co-riparians of the Nile (except Ethiopia) were ruled by foreign colonial powers.”

The paper recommends three approaches to resolving the Nile impasse: the conclusion of the negotiations and adoption of a new treaty binding all riparian states; the promotion of ratification of the 1997 UN Convention on the Law of the Non-Navigational Uses of International Watercourses; and the referral of the issue of the legality of the Nile treaties to a judicial or arbitration forum.

Uganda's Water Minister Mary Mutagambwa said negotiations were not over. "The agreement will be ratified after members sign it, and it is open for signature for a year," she said. "[It] offers all of us the opportunity to unite and develop. [Egypt and Sudan] do not want interruption of the current usage. It is a matter of convincing them and I hope that within this year we can bring them on board."

The agreement attempts to review two deals signed in 1929 between Egypt and its former colonial power, Britain, and in 1959 with Sudan. The accords give Egypt and Sudan the biggest share of the water, totalling up to 87 percent of Nile flow. Egypt also has the power to veto dams and other water projects in upstream countries. To monitor the water levels, it maintains teams of engineers along the river including at its source in Jinja, and in Malakal in Southern Sudan.

Critics say the agreements are pre-colonial because they were signed before the other riparian states became independent, but Egypt insists they were done to safeguard its interests. "Egypt's historic rights to Nile waters are a matter of life and death. We will not compromise them," Moufid Shehab, Egyptian Minister of Legal and Assembly Affairs, was quoted as telling parliament recently.

In Khartoum, Sudan's legal counsel to Nile Basin Initiative Ahmed Al-Mufti told a news conference on 11 May that his government's position was not to sign the agreement until all the nine states reached a solution to the issues in dispute. This position, observers say, could change if Southern Sudan voted for independence in a 2011 referendum.

The view from Cairo and Khartoum was echoed by Eritrea, which had observer status at the negotiations. In a statement issued by the Eritrean information ministry, President Isaias Afwerki said the upstream states had made "wrong agreements and regulations" on the use of the Nile river. He told Egyptian television that this "not only aggravates the situation but also creates tension”.

Flowing 6,825km from Lake Victoria to the Mediterranean, the Nile is the longest river in the world. It discharges about 300 million cubic metres of water daily and provides Egypt, which receives almost zero rainfall, with about 90 percent of its water needs. Four hundred million people live in the countries that share the river.

Experts say Egypt's population could reach 130 million in 40 years, thereby increasing its demands. On the other hand, Ethiopia wants to build more dams on the Blue Nile, while Sudan has promised foreign farmers vast pieces of land. In Kenya, farmers want to expand irrigation while Uganda is planning dams and Tanzania intends to build a 170km pipeline from Lake Victoria to supply dry areas.

According to the ISS, almost one in two people in Africa will, within 25 years, live in a country facing water scarcity or “water stress” because of rapid population growth and economic development. By 2025, some 12 African countries will have joined the 13 that already suffer from water stress or water scarcity.

"There is a lot at stake for all the players in the region and perhaps for Arab-African relations as a whole, already strained by years of neglect and outright conflict in Sudan," Zahran noted. "As climate change continues to affect an already parched region, reliance on the Nile, which flows through 10 percent of Africa and is shared by 10 countries, is only increasing."

IRIN

Egypt launches diplomatic flurry to contain Nile crisis

Senior Egyptian officials left for Khartoum on May 19 amid a diplomatic flurry that will see several African leaders in Cairo in the coming weeks seeking to contain the region's water-sharing crisis.

Mohammed Nasredine Allam, Egypt's minister for water resources and irrigation, is heading to Sudan for talks on Nile water sharing after five upstream countries signed a deal that Cairo and Khartoum rejected, the official MENA news agency reported.

Allam, accompanied by senior foreign ministry officials, is expected to discuss with his Sudanese counterpart, Kamal Ali, "ways for both countries to maintain their rights (to Nile water) based on international agreements."

Under a 1959 agreement between Egypt and Sudan, they get the lion's share of the water flow.

On May 19, Kenya became the fifth country to sign a new treaty -- after Ethiopia, Rwanda, Tanzania and Uganda -- for what is claimed to be an equitable sharing of river waters, despite strong opposition from Egypt and Sudan.

Kenyan Prime Minister Raila Odinga was due in Egypt on May 22 for talks with Egyptian President Hosni Mubarak and Prime Minister Ahmed Nazif.

On May 29, Congolese President Joseph Kabila is due to visit Egypt and in June Burundi President Pierre Nkurunziza is also expected in Cairo, MENA said.

In June, Egyptian Minister of Agriculture Amin Abaza and Investment Minister Mahmud Mohiedine will head to Ethiopia and Uganda for talks with officials there, MENA said.

Egypt has repeatedly claimed its "historic right" to the Nile water and threatened legal action to preserve its right to the water on which its 80 million people depend.

The upstream countries want to be able to implement irrigation and hydropower projects in consultation with Egypt and Sudan, but without Egypt being able to exercise the veto power it was given by a 1929 colonial-era treaty with Britain.

AFP

Countries disagree on Nile River water usage

by Dina Zayed

In arid Egypt, officials have long angered fellow Nile Basin countries by clinging to colonial-era water treaties giving it rights to the lion's share of water flowing down the world's longest river. But upstream nations desperate for development are hoping to break with the past, threatening to shut regional heavyweight Egypt out of a new pact and potentially deepening an already bitter struggle for water resources across this parched region.

"This is a crisis in Egypt's relations with Nile Basin countries," said Gamal Soltan, head of the Al-Ahram Centre for Political and Strategic Studies. The feud could also upset the balance between poor upstream nations and Egypt, the Arab world's most populous nation, where climate change threatens a fragile farm sector and population growth may outstrip water resources as early as 2017.

The latest chapter in the long-running feud over waters from the Nile, worshipped as a deity in ancient Egypt, came when upstream countries declared after a water meeting in Sharm El-Sheikh this month that they would launch separate talks since Egypt and Sudan refused to revise water pacts dating to 1929.

"Egypt's historic rights to Nile waters are a matter of life and death. We will not compromise them," Moufid Shehab, minister of legal and assembly affairs, told parliament after the talks. The 1929 deal, brokered on one side by British colonial powers in Africa, gives Egypt 55.5 billion cubic metres a year, the biggest share of a flow of some 84 billion cubic meters. It also gives Cairo the power to veto dams and other water projects in upstream countries that include six of the world's poorest nations.

"We will not sign on to any agreement that does not clearly state and acknowledge our historical rights," Egyptian Water Minister Mohamed Nasreddin Allam said after the meeting.

But analysts say Egypt, eager to style itself as a leader of both Arab and African nations to enhance its global clout, must improve ties with upstream countries that in the future may take on greater economic and commercial importance.

"Egypt has tried in the past to complicate the issue ... They are dragging their heels," Shimeles Kemal, spokesman for the government of Ethiopia, source of the Blue Nile. Egypt and Sudan "are pushing for a position that would negate everything we've achieved in years of talks and negotiations", said Isaac Musumba, Uganda's state minister for regional cooperation.

Upstream states have invited Egypt and Sudan to take part in the new deal -- whose legal standing would be uncertain -- but on their terms. "We hope to convince them," said Christopher Chiza, Tanzania's deputy minister of water and irrigation.

Talk of such a deal triggers alarm in Egypt, where Nile waters feed a farm sector accounting for a third of all jobs. Egypt, unlike upstream nations, cannot rely on rain and gets 87 percent of its water needs from the Nile. Climate change and rising sea levels could also swallow much of the slim, fertile Nile Delta in Egypt, already the world's largest wheat importer, and cost it $35 billion this century, the United Nations has estimated.

Large-scale projects reclaiming arid land or building dams in upstream nations could further strain water use in Egypt, while increased upstream farming could bring more pollution. But even if upstream countries ink the new deal, which could take place as early as May 14, they may not have the financial muscle in the near term to build dams and other projects that would allow them to siphon more water from the Nile.

"Practically, even if those countries sign a framework agreement without Egypt, its effects won't be lasting ... how are (upstream countries) going to stop the flow of water?" said Safwat Abdel-Dayem, secretary general of the Arab Water Council. "It's premature to say they will build dams so we will lose water and (Egyptian) agriculture will be slashed," he said.

Globals donors and banks could be unlikely, for one, to provide the finance needed to build upstream water projects for fear of getting tangled in a regional diplomatic spat. Analysts say a new treaty could nonetheless boost investments in African nations' land reclamation projects, and help attract foreign investment in upstream farmland.

"It would seem that a new deal, provided it covers an extended period and is enforceable, could be good for potential investors," said Aziza Akhmouch, an analyst with the Organisation for Economic Cooperation and Development. "It would reduce current uncertainty about the future availability of water."

The conflict threatens to further dilute the sway of Egypt, perched at the nexus of Arab and African worlds, in the region. "Egypt has lost a great deal of its influence in Africa, and has run (through) a lot of its cards," said Sharif ElMusa, a water politics expert at the American University in Cairo. Egypt should not seek to stick to historic water treaties, it should focus on bilateral talks with each country or take its case to an international arbitrator, Soltan said.

"We need more holistic policies including other policy areas branching into economic, cultural, and political ties," echoed Osama Ghazali Harb, head of a liberal opposition party.

The government may be taking heed. It has pledged doubling funds for development projects with upstream nations. It is also trying to enforce better management at home. Egypt has cut back on water-intensive crops like rice, a key export, but could see a 47 percent drop in maize output.

Experts say Egypt is not moving fast enough to cut its dependence on the Nile or shift the diplomatic focus from divvying up water to how to better use it across borders.

Reuters

Egypt warns against Nile Basin pact

Egypt has insisted on its traditional share of the Nile river and warned basin countries against signing a water-sharing agreement in which it is excluded.

The warning came days after Nile basin countries meeting in Egypt failed to agree on a framework to reallocate shares from the river, a longstanding demand by several up-stream countries.

"Egypt's share of the Nile's water is a historic right that Egypt has defended throughout its history," Mohammed Allam, minister of water resources and irrigation, told parliament. He added that Egypt saw the matter as a national security issue.

"Egypt reserves the right to take whatever course it sees suitable to safeguard its share," he said. "If the Nile basin countries unilaterally signed the agreement it would be considered the announcement of the Nile Basin Initiative's death," Allam added.

The Nile Basin Initiative, the World Bank funded umbrella group of Nile basin countries, has put off signing a water sharing pact over objections from Egypt and Sudan.

At the heart of the dispute is a 1929 agreement between Egypt and Britain, acting on behalf of its African colonies along the 5,584-kilometre (3,470-mile) river, which gave Egypt veto power over upstream projects.

An agreement between Egypt and Sudan in 1959 allowed Egypt 55.5 billion cubic metres of water each year -- 87 percent of the Nile's flow -- and Sudan 18.5 billion cubic metres.

Some of the Nile Basin countries, which include Ethiopia, Tanzania, Uganda, Kenya and the Democratic Republic of Congo, say past treaties are unfair and they want an equitable water-sharing agreement that would allow for more irrigation and power projects.

Egypt, a mostly arid country that relies on the Nile for the majority of its water, argues up-stream countries could make better use of rainfall and have other sources of water.

AFP

Egyptian investment firm signs land deal for Sudan rice farm

by Shaimaa Fayed

A unit of Egyptian private equity firm Citadel Capital signed a 30-year lease agreement for land south of Khartoum to build Sudan's first large-scale commercial rice farm, Citadel said in a statement.

Gulf and other Arab countries have been investing in a range of farming projects in Sudan, Africa's biggest country by area and long viewed as having huge agricultural potential.

The land leased by El-Nahda for Integrated Solutions, a portfolio company of Wafra, Citadel's platform company in the Sudanese agricultural industry, spans 60,000 feddans (25,210 hectares).

"The farm will produce rice primarily for domestic consumption in Sudan, a net importer of rice, allowing any excess to be exported to other nations in Africa and the Middle East," Citadel said in its statement.

Cairo-based Citadel, which controls $8.3 billion in investments spanning 14 countries, has made various ventures in the Sudanese market including buying a majority stake in a Sudanese biscuit and sweet maker last year.

"As the third portfolio company under Wafra, El-Nahda builds on our experience at Sudanese Egyptian Agricultural Crops Company (SEAC) and Sabina," Citadel Managing Director Hisham El-Khazindar said in the statement.

"Sabina is on track to have 3,000 feddans under cultivation by next June, while SEAC will be ready to seed 20,000 feddans by the onset of the rainy season in mid-2011," he said.

The statement said the lease area is flooded for up to eight months a year by water held back by the Jebel Al-Awliaa Dam.

Sudan has a varied climate, with heavy rainfall in some areas and water from the Nile which means it can grow a range of crops from wheat and animal feed to citruses and oilseeds.

Reuters

Egypt leases land in Uganda

by By Rachel Pollock

The Egyptian government announced February 1st that it would be sending a committee to assess farmland in Uganda to grow wheat to then import back into Egypt.

Egypt is the leader in wheat consumption and has historically relied mostly on imports. According to the Central Agency for Public Mobilization and Statistics, Egypt consumes 14 million tons of wheat a year but is only able to produce 8 million tons.

Egypt has also been interested in formalizing agreements with the Ugandan government, since September of last year. While this has brought up ethical questions of exploitation, another concern is how this arrangement will impact earth changes and food security in the future.

According to a study conducted by the Uganda Journal of Agricultural Sciences in 2006, wheat production has remained stagnant since its introduction to the districts of Kabale and Kisoro during the rainy seasons of 1999.

In another report on organic agriculture development in Uganda by the Ministry of Agriculture and the United Nations Development Programme, Uganda was reported to hold 35 percent of the total share of the organic market in Africa. While 85 percent of Uganda’s population is engaged in agriculture, 80 percent of the earnings are due to exports. The report states that maximizing wheat productivity has been a problem because of little investment in organic agriculture, limited research, and a lack of small holders being able to meet the demands of a high volume market.

Last year, Egypt sent a team of specialists to conduct studies on the farmland in Uganda, as well as collect data on exporting grain. Laboro, in the Gulu district, was found to be the most suitable environment to grow wheat, and the Egyptian specialists have since identified several other locations.

Egypt has also acquired land in May of 2008 in Sudan for the same purposes, cultivating 2 million acres near the border town of Wadi Halfa, according to Amin Abaza, Agricultural Minister of Egypt.

Egypt currently operates three farms in African countries: a rice farm in Niger, a vegetable farm in Tanzania, and a corn farm in Zambia. Egypt intends on providing training for small-scale farmers, equipment, and employment for the rural communities.

According to a report of the International Food Policy Research Institute, wheat production will fall by 22 percent in the next 40 years due to overpopulation and climate change.

Media Global

Egypt becomes biggest commercial land investor in Ethiopia

by Desalegn Sisay

Ethiopia is set to grant 20,000 hectares of land to Egypt, making the latter the biggest foreign investor of agricultural land in Ethiopia.

A branch of the Ministry of Agriculture and Rural Development (MoARD), in charge of commercial farming, has agreed to accept Egypt’s proposal. "We are in the process of providing the farm land," said a source who demanded anonymity. The land is in the Afar Regional State. Egypt’s request was submitted through its National Bank which is expected to sign the deal by the end of the month.

Ethiopia’s policy shift made last year, allowing foreign entities to grab huge commercial farmlands, has attracted a lot of attention from both foreign companies and countries.

The Government of Djibouti was the first to obtain 3,000 hectares of farmland in Bale, a suitable agricultural zone in the Oromia region located some 400 kilometers south of Addis Ababa.

Karaturi, an Indian company, and Saudi Star, established by Sheik Mohamed Al Amudi, a Saudi national billionaire, have also obtained land with the aim of growing export crops for their respective countries. The land deals were made directly with the central government.

Ethiopia has no specialised institutions charged with the promotion of commercial farming despite the country’s new land policies.

But with a growing demand from many foreign entities, the Ethiopian "Government is in the process of establishing a federal body under MoARD" to handle such demands, the source said.

Recently, an Egyptian delegation headed by their Prime Minister, Ahmed Nazif, visited Ethiopia. The 26 member delegation made up of Ministers and heads of agricultural companies met with Ethiopian Prime Minister, Meles Zenawi and expressed both the Egyptian government’s and private companies’ interest to invest in Ethiopia.

According to Ahmed Nazif, the National Bank of Egypt will invest at least 40 million in the agricultural sector. He also said that five Egyptian drug companies were also preparing to invest in the Ethiopian health sector.

Afrik