Economic Rationale for Cooperation on International Waters in Africa

Abstract

Transboundary river basins cover 62 percent of Africa's total area and, with the exception of island states, every African country has at least one international river in its territory. Thus, transboundary water governance in Africa is central to any national or regional water strategy and any economic, poverty reduction, and environmental strategy. Despite the potential payoff from water cooperation, forging meaningful agreements for shared water management faces numerous challenges. Impediments to negotiated cooperation include differences in up- and downstream views on water rights and histories of water use; negotiating philosophies focused on the belief that water is a zero-sum game; geographic and political power differentials that conflict with basin-wide solutions; and uncertainty over basic water resources data that increase the perceived risks of cooperation. For cooperation to occur, riparian states, other stakeholders, and the facilitators of negotiation must be aware of the possible benefits of cooperation, whether benefit distribution will be shared, and what pathways are most likely to overcome potential barriers to negotiation. Economic theory and empirical analysis can play a productive role in providing the necessary information. This paper provides a review of the challenges to transboundary water cooperation, pathways for overcoming those challenges, and the role of economics in facilitating the discovery of those pathways. While it is written to focus on African transboundary waters, the report draws from broader transboundary water literature. Appendices include case studies on both game theory and hydro-economic analysis in transboundary cooperation for several river basins, including some from Africa. The limited studies that have quantified the gains from cooperation or costs of noncooperation show that the potential benefits are substantial. Recognizing the potential gains and costs for all parties provides a motivation for cooperation. The likelihood of cooperation around river basins is minimal if cooperation does not benefit the respective actors involved. In the final analysis, cooperation should be voluntary based on the self-interest of riparian states.