Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Water It's essential to daily life and well being, but
Speaker 2: across the African continent, investment into this resource is addressing
Speaker 2: vastly different initiatives.
Speaker 3: This project makes Lesutu probably one of the most impactful
Speaker 3: countries in the world. In this says that this water
Speaker 3: powers the biggest economic hub in Africa.
Speaker 2: With some countries facing crippling water shortages and some others
Speaker 2: with plenty to spare, water diplomacy is emerging as a
Speaker 2: potential solution to help ease the disparities.
Speaker 4: I often say to the Prime Minister of Lisutu, what
Speaker 4: you get free from nature, you now package to sell
Speaker 4: to us. You then ask us to come and build
Speaker 4: the dam and build the channels to bring free water
Speaker 4: to Howding to Hannesburg, and then you want money for it,
Speaker 4: And he says, that's what small countries do.
Speaker 2: On today's podcast, we'll look at a multi billion dollar
Speaker 2: water sharing deal between Lesutu and its neighbors South Africa
Speaker 2: and whether similar transnational deals can become commonplace across the continent.
Speaker 2: I'm Jennifer's Abasaja and this is the Next Africa Podcast,
Speaker 2: bringing you one story each week from the continent, driving
Speaker 2: the future of global growth with the context only Bloomberg
Speaker 2: can provide. And in a moment, we're going to speak
Speaker 2: with Olivier Kojels, who's had a fifty year career advising
Speaker 2: governments across both Asia and Africa on water. He's also
Speaker 2: former CEO of the Mekong River Commission. But first I'm
Speaker 2: pleased to be joined by Bloomberg's Andre Pierre Duplaci, who
Speaker 2: traveled with me to Lusutu to find out more about
Speaker 2: progress on the Lusutu Highlands Water Project. We travel to
Speaker 2: Li Su Tuo together and you know better than most
Speaker 2: that this relationship between the Sutu and South Africa dates
Speaker 2: quite a long way back. It'd be helpful, I think
Speaker 2: for viewers and listeners to actually understand where this is
Speaker 2: coming from before where it's going. Can you just give
Speaker 2: us a bit of history about this project.
Speaker 5: I mean, the story starts decades before this treaty was
Speaker 5: signed in the nineteen eighties, so you know, people have
Speaker 5: an eyeing list Cuitus water. As far back as the
Speaker 5: nineteen fifties, engineers realized something quite remarkable. This small mountain kingdom,
Speaker 5: which only makes up a tiny part of the basin
Speaker 5: of the Orange River supplies a huge share of the
Speaker 5: water because of its high rainfall and altitude. You know,
Speaker 5: if you look at the topographic map of Southern Africa,
Speaker 5: it's quite fascinating.
Speaker 6: It's a spike all around Leasutu.
Speaker 5: I think it's about one thousand meter or just about
Speaker 5: three thousand foot in elevation. It's the highest independent nation
Speaker 5: on Earth, so you can imagine the amount of water
Speaker 5: it gets.
Speaker 6: And so you know, fast forward. So engineers, obviously now.
Speaker 5: They're thinking in the nineteen eighties, towards the end of
Speaker 5: a party, the South African government and places like Johannesburg,
Speaker 5: the industrial heartland of South Africa was growing at a
Speaker 5: rapid speed and so they looked to list to which
Speaker 5: at the time at very little else in terms of
Speaker 5: natural resources.
Speaker 6: So the two countries.
Speaker 5: Stroke a deal in nineteen eighty six to basically turn
Speaker 5: this geography into an economic partnership. And I think a
Speaker 5: lot of people say, oh, but what's so unique about
Speaker 5: this compared to other dams, other water sharing agreements on
Speaker 5: the continent. Well, this one focuses on sharing money as
Speaker 5: a commodity, so it monetizes.
Speaker 6: Water, which makes it unusually commercial.
Speaker 5: It's one of the few examples on the continent where
Speaker 5: water is effectively treated as an export commodity.
Speaker 2: That sort of speaks to what we heard on the ground,
Speaker 2: which seemed to be that this new phase of the
Speaker 2: agreement and of the project could potentially mean something different
Speaker 2: for Lsuitu than years past. Did you get that same sense.
Speaker 5: This treaty that's been signed in nineteen eighty six was
Speaker 5: very much based on the economics of the eighties. What
Speaker 5: I mean by that is, you know, at that time,
Speaker 5: governments around the world thought of these kind of engineering
Speaker 5: projects as an engineering solution and cost comparison.
Speaker 6: So if we build.
Speaker 5: It in Lacitu, South Africa arguit we'll share the savings.
Speaker 5: So Lasuitu right now in twenty twenty six, they still
Speaker 5: get a share.
Speaker 6: Of South Africa's savings. But today, forty.
Speaker 5: Years later, natural resources are usually priced based on scarcity.
Speaker 5: You know, living in Johannesburg, we see how this is
Speaker 5: the growing issue. So the more scarce were to become,
Speaker 5: you should automatically earn more. I think that's an argument
Speaker 5: that the National Resources Minister of LU told us, and
Speaker 5: that's a big reason I think why last too, now
Speaker 5: wants to revisit the deal which comes up for renewal.
Speaker 5: The royalties agreement comes up for renegotiation, and part of
Speaker 5: this treaty says that every twelve years there should be
Speaker 5: some kind of discussion about what the core elements are
Speaker 5: of this nineteen eighty six deal, which it seems like
Speaker 5: the government of LSITU indicated that for the past decade
Speaker 5: they haven't really come to an agreement of what this
Speaker 5: new royalty payment should be.
Speaker 2: Thanks ap, let's bring in now the role that water
Speaker 2: is playing in Pan African diplomacy. Joining me now is
Speaker 2: Olivier Kojels. He's had a long career advising governments across
Speaker 2: Asia and Africa on water issues and he's also Professor
Speaker 2: Emerita at you see levent Olivia.
Speaker 7: Thank you so much for your time.
Speaker 2: Maybe you can speak from your own perspective, how important
Speaker 2: are agreements like what we saw with Lissutu and South
Speaker 2: Africa going to be as more countries struggle with water shortages.
Speaker 2: What has been your experience in some of these treands
Speaker 2: boundary agreements.
Speaker 1: Yeah, the agreements are absolutely essential, but one thing must
Speaker 1: be clear is that this specific case of risotto transfer
Speaker 1: to South Africa is a very unique and very specific
Speaker 1: because it's about selling water from one country to another,
Speaker 1: and that is not at all the situation elsewhere in Africa.
Speaker 1: So agreements are absolutely needed, that they are there already,
Speaker 1: but they have to be inforced. But it's much more
Speaker 1: complex than just one country selling water to another, although
Speaker 1: I know it's already something very difficult in other African basins.
Speaker 1: The situation is even much more complex than that. I've
Speaker 1: been working in most of other African basins. Of course,
Speaker 1: after the Meccong, I have been a lot involved in
Speaker 1: the Night Basin with the Grant Ethiopian Rensaissance Dam and
Speaker 1: the issues there between Ethiopia and Egypt and so. But
Speaker 1: I've been working the selling out basin, the nis Air Basin,
Speaker 1: the many many other Zambasi whatever. There are so many.
Speaker 1: There are sixty or more than sixty basins transboundary where
Speaker 1: situation is extremely complex because sometimes you have a lot
Speaker 1: of countries. The Nihle is eleven countries, the Niz nine countries,
Speaker 1: the Vault has six. So countries are interconnected. They are
Speaker 1: upstream and sometimes upstream and downstream or only downstream. It
Speaker 1: is extremely complex and all the time very specific situations,
Speaker 1: so we cannot transpose one agreement to another. It's not possible.
Speaker 7: And stick with me, Olivia.
Speaker 2: We're going to take a quick break and when we
Speaker 2: come back, we'll hear more about some of the challenges
Speaker 2: around water diplomacy across the continent.
Speaker 7: We'll be right back, Welcome back. Today.
Speaker 2: We are looking at the role water is playing in
Speaker 2: Pan African diplomacy. We have Olivier Coajels still with me now, Olivia.
Speaker 2: We saw with the JR. Dam, the Grand Ethiopian Renaissance
Speaker 2: to them some of the complications that come with multiple
Speaker 2: countries being along one certain water base. How do you
Speaker 2: get to and address the confluence of issues that everyone
Speaker 2: sort of brings to the table.
Speaker 1: Yeah, it's a huge, enormous challenge and only very small,
Speaker 1: limited basins have succeeded to do it very well. And
Speaker 1: the most successful example is the sending out river basin.
Speaker 1: And that's the philosophy, and that's the approach that everybody
Speaker 1: should have. It's saying heads of states come together and
Speaker 1: they are aware that alone they cannot solve the water crisis,
Speaker 1: they cannot fight against drought alone, et cetera, et cetera.
Speaker 1: And when they have this conviction. Then they sit down
Speaker 1: and they say, okay, let's work together, and then they
Speaker 1: co invest, they go, they borrow together, they invest, they
Speaker 1: operate their dams together. They even shed sometimes the ownership
Speaker 1: of the dams. But that is very rare most of
Speaker 1: the time, and that is why it's not working. Cooperation
Speaker 1: over water in trans boundary river basins, it's not working well.
Speaker 1: It's very weak. Agreements are weak, institutions are poor, they
Speaker 1: have no money, they have no staff. It's very because
Speaker 1: there are many issues we can talk about.
Speaker 7: It, yeah, please please.
Speaker 1: The main thing is about sovereignty and this is why
Speaker 1: it is so difficult. Of course, now the pressure is
Speaker 1: so great on population growth is so enormous in Africa.
Speaker 1: Just take that one as probably the main driver of everything.
Speaker 1: It's just remind that when I was born in nineteen fifty,
Speaker 1: there were two hundred and fifty million Africans two hundred
Speaker 1: and fifty in Sub Saharan Africa, and I hope I
Speaker 1: will die before twenty fifty and there will be two billion,
Speaker 1: five hundred Africans. They have to share the same amount
Speaker 1: of water, you can imagine. So that's why every country
Speaker 1: we has a big pressure from insight to develop and
Speaker 1: economically they are more powerful now and they have more
Speaker 1: money so they can develop dams and borrow money from
Speaker 1: even now Asian countries, China, whatever. The issue is that yes,
Speaker 1: as we country wants to build the dams for their
Speaker 1: own people. It's about national interest above all. And you
Speaker 1: know about the sovereignty in issue in Africa now which
Speaker 1: is growing everywhere. That is the main issue. Well, whatever
Speaker 1: you are a rich country in terms of dams, in
Speaker 1: terms of water, you may be in Aia with a
Speaker 1: lot of water, or you Ethiopia with a lot of
Speaker 1: water as compared to Egypt with has nothing. Whatever the
Speaker 1: situation you want. The main reaction of every government for
Speaker 1: electoral reasons is to have unilateral decisions and to promise
Speaker 1: food self sufficiency and these kinds of things and electricity production,
Speaker 1: hyperpower development. So infrastructure is booming and that is because, yeah,
Speaker 1: the demand is booming because population and economy, development and
Speaker 1: urbanization and so on. Overcoming this sovereignty, the willingness of
Speaker 1: developing national interest first is the main challenge and that's
Speaker 1: why River basin organizations. There are so many agreements have
Speaker 1: been signed, but very general, very very basic, like saying
Speaker 1: we may not harm each other. Okay, but what does
Speaker 1: it mean exactly? We have to have equitable use. Yes, okay,
Speaker 1: we all signed that, but what is the quitable So
Speaker 1: you see the issue is that the agreements are too
Speaker 1: weak and a week because the political willingness to do
Speaker 1: things together is not there. It's not there in most cases.
Speaker 1: You have exceptions, but in most cases it is not
Speaker 1: still there.
Speaker 2: And I wonder if a model like what we are
Speaker 2: seeing with the Sutuo in South Africa potentially then can
Speaker 2: work for others. You know, you're mentioning sort of the
Speaker 2: disparity between some of these resource rich countries like Lasutu
Speaker 2: has plenty of water, South Africa is struggling with its
Speaker 2: own water issues. Maybe they balance each other out in
Speaker 2: terms of Lisuto is now able to leverage that resource
Speaker 2: right in order to build up its own economy. So
Speaker 2: it could be a win win situation, right or do
Speaker 2: you think that ultimately they are going to be winners
Speaker 2: and losers across the board.
Speaker 1: It's much more complex. Then you cannot go generalized South Africa.
Speaker 1: That's that's more like a resource you take, you put
Speaker 1: in the pipe and you send to another country and
Speaker 1: you sell it. It's never like this elsewhere elsewhere water
Speaker 1: is flowing since millions of years through countries, and you
Speaker 1: cannot sell water which is flowing. How can I would
Speaker 1: say Boulkina Faso sell its water to Ghana. That doesn't
Speaker 1: make sense. It flows, that's it. What happens is that
Speaker 1: if Bokina is building tens and hundreds of small dams,
Speaker 1: Ghana will suffer from having less water. And then you
Speaker 1: have a yeah, you have need to negotiate or you
Speaker 1: have a dispute. But it is not about okay, you
Speaker 1: have a lot of water, you can sell it to me.
Speaker 1: That doesn't work like this. It's about saying, okay, you
Speaker 1: have two ways to go. Either we continue inilaterally and
Speaker 1: then we try to mitigate the disputes and we continue
Speaker 1: to fight but in a moderate way and do some
Speaker 1: compromises afterwards. All we plan in advance, we do up
Speaker 1: and that is my approach. That is my vision is
Speaker 1: to do everything just upfront and not afterwards when things
Speaker 1: are cooked. You know, when things are cooked, they are
Speaker 1: not optimal. Dams are not always on the right place
Speaker 1: in the basin. Because we talk about the basin, which
Speaker 1: is shared by five six seven, ten countries and we
Speaker 1: have to of course, water is scarce because population is growing,
Speaker 1: we have to optimize water use and optimizing water use,
Speaker 1: that doesn't mean that every country has to build dumps
Speaker 1: whenever wherever it wants. That doesn't make sense physically, economically, politically, etc.
Speaker 1: So it is a big mess. I think it's funny.
Speaker 2: I was listening to President Ramaposa here in South Africa
Speaker 2: earlier this week and he was talking about the list
Speaker 2: To Dam project and speaking to exactly what you just said.
Speaker 2: He said, how are they charging us for water? You know,
Speaker 2: he was talking in jest, but sort of alluding to
Speaker 2: what you were just saying there, Olivier, before we let
Speaker 2: you go. I wonder what is at risk if we
Speaker 2: don't see this water diplomacy actually succeeding. You mentioned the
Speaker 2: population growth, but with other natural resources, we've seen them
Speaker 2: be a catalyst for conflict. Do you think that is
Speaker 2: potentially where we're headed or is there potentially an opportunity
Speaker 2: to get ahead of this before we get to that point.
Speaker 1: If there is the political awareness, maybe with the help
Speaker 1: of the African Union to say okay to heads of
Speaker 1: states now stop, we cannot continue to work inilaterally and
Speaker 1: build our dams without communicating always limited communication to the neighbors.
Speaker 1: And we cannot just continue like this. Let's have it
Speaker 1: at the highest political level. That's my way of seeing.
Speaker 1: You need a declaration at heads of state level of
Speaker 1: the African Union saying no, we need to coordinate. And
Speaker 1: my word, my approach, my doctrine, I would say, I
Speaker 1: call it the doctrine of coordinated investment that is published
Speaker 1: now is really don't talk about no harm and equitable use.
Speaker 1: You can do that, but in addition you have to
Speaker 1: have the commitment of heads of states saying okay, now stop,
Speaker 1: we cannot go for disputes all over the places in
Speaker 1: Africa about water. That doesn't make sense, It is not
Speaker 1: worth it. Let's discuss really with a vision for the
Speaker 1: future and have the declaration saying, whatever big dams we build,
Speaker 1: we do it in a coordinated way, not only the
Speaker 1: planning but also financing and certainly operation. Because you have
Speaker 1: cascades of dams and you have to even in the
Speaker 1: Nile GRD is not the only one. You have a
Speaker 1: cascade of dams just to us one. You have to
Speaker 1: to manage the jointly. The dams may be there, but
Speaker 1: at least you have also to operate the water releases
Speaker 1: attat the right time and all these things have to
Speaker 1: be done. So the keyword is coordination, and my doctrine
Speaker 1: calls doctrine of coordinated investment upfront and not when the
Speaker 1: things are cooked.
Speaker 2: And thanks again so much to Olivia Cojails and also
Speaker 2: Andre Pierre do play C for joining us this week.
Speaker 2: You can read more of our reporting from Lasutu on
Speaker 2: Bloomberg platforms. Now here's some of the other stories we've
Speaker 2: been following across the region this week. With fuel prices
Speaker 2: surging as much as eighty one percent, African governments are
Speaker 2: rolling out subsidies and cutting taxes to help cushion households
Speaker 2: from an increase in energy costs triggered by the US
Speaker 2: Israeli War on a run and Mozambique repaid about seven
Speaker 2: hundred million dollars to the International Monetary Fund ahead of
Speaker 2: schedule and in full, a surprise move that raised questions
Speaker 2: about its motivations and the status of talks over a
Speaker 2: potential new program with the lender. And you can follow
Speaker 2: these stories across Bloomberg, including the Next African Newsletter. Will
Speaker 2: put a link to that in the show notes. This
Speaker 2: program was produced by Adrian Bradley and tiwa Adebayo. Don't
Speaker 2: forget to follow and review the show wherever you usually
Speaker 2: get your podcasts, But for now I'm Jennifer Zabastaja.
Speaker 7: Thanks, as always for listening.