The construction of a new dam in Ethiopia has put Egypt’s farmland at risk and could radically change the face of Egyptian real estate.

1. DAM MAY CAUSE EGYPT TO
LOSE OVER 70 PERCENT OF
ITS FARMABLE LAND

2. • Egypt has experienced a lot of uproar in the past year over the possibility of losing a
significant amount of land in the coming months. A recent study conducted through
Cornell University, the University of Southern California, and the National Aeronautics
and Space Administration (NASA) found that Egypt stands to lose more than 70
percent of its farmland once the latest phase of the Grand Ethiopian Renaissance Dam
is completed.
• This dam project will create a number of development opportunities on the Ethiopian
side, but will also change the flow of the Nile River significantly. This change in flow
will likely cause major water deficits for Egypt if the two nations cannot adopt some
sort of agreement to address the problem.

3. GRIM PREDICTIONS FOR THE FUTURE OF
EGYPTIAN FARMLAND
• An Egyptian scientist named Essam Heggy worked on the study, which estimates
a loss of 72 percent of arable land in Egypt upon the completion of the second
phase of the Ethiopian dam. As a result, Heggy has called for a joint agreement
between Ethiopia and Egypt on water storage to prevent significant losses and
help maintain some of the critical farmland in Egypt.
• The loss of water in Egypt could be up to 40 percent of the country’s current
share—and less water and farmland means fewer jobs. Unemployment rates
could rise to 25 percent at a result of the dam, and Egypt’s GDP could drop by
as much as 8 percent.

4. GRIM PREDICTIONS FOR THE FUTURE OF
EGYPTIAN FARMLAND
• While Heggy has acknowledged that Egypt has the capability of overcoming this
crisis, it still leaves the nation very vulnerable. Any other environmental crises in
the near future could potentially cripple Egypt’s water supply. Addressing the
problems before they occur is key for protecting the future of both countries.
• Some of the investors in the Renaissance Dam may be looking for a quick profit
and may not understand the ramifications of the project. After all, the effects of
this second phase will affect not just Egypt, but the entire region. This is
especially disconcerting given that the Nile River is one of the cradles of human
civilization and has an important ecological and economic role to play in the
region.

5. EGYPT’S LONGSTANDING WATER WOES
• Water scarcity has affected Egypt since before the construction of the Grand
Ethiopian Renaissance Dam, which only began filling about a year ago. Today,
the Nile River hardly reaches all the way to the Mediterranean Sea, a problem
that has been going on for a long time.
• The primary drain on the Nile, which was once regarded as an unending water
resource, is the growing population in Egypt. The nation’s population is growing
beyond the capacity of the Nile, which is both a domestic and international risk.
Water scarcity will make agriculture difficult in the country and drive up food
prices. Rising food prices could trigger unrest and political instability.

6. EGYPT’S LONGSTANDING WATER WOES
• Egypt has already undertaken efforts to manage and conserve its water
resources more efficiently, especially with its 2017 National Water Resources Plan.
However, this plan calls for the investment of $50 billion by 2037 and only a third
of the funding has been committed. Getting the rest will be difficult, considering
how much the proposed dam could impact gross domestic product.
International aid may be necessary.
• Moreover, the plan has been criticized for imposing penalties on farmers who
have inefficient irrigation practices but no money to address this problem. Drip
irrigation can help farmers reduce their water waste significantly and even save
money in the long term, but it represents an upfront investment.

7. EGYPT’S LONGSTANDING WATER WOES
• The path forward will likely involve working collaboratively with other nations
who share Egypt’s water resources and figuring out how to meet everyone’s
needs as effectively as possible.

8. WATER PROBLEMS COULD HAVE RIPPLE EFFECT
ON EGYPTIAN REAL ESTATE
• The water shortage will likely have a dramatic effect on real estate development
throughout Egypt. Without irrigation, farmland will succumb to desert and more
people will be moving from rural to urban areas, which means that even more
housing will be needed to accommodate the growing population.
• Egypt has recently been developing several new major urban centers meant to
release the pressure on Cairo, but even these new areas may be crowded in a few
years. Furthermore, there is a significant need for infrastructure development to
support these new cities, especially in terms of water delivery and conservation.
Already the nation is looking into ways to increase its treated wastewater, which has
the potential to increase water availability by about 5 percent. Desalination is
another potential solution, but it is costly, energy-intense, and not a complete
solution on its own.

9. WATER PROBLEMS COULD HAVE RIPPLE EFFECT
ON EGYPTIAN REAL ESTATE
• The other major question that needs to be answered is what happens to the
arable land that may be destroyed by the Renaissance Dam. Ideally,
collaborations with key partners will lead to agreements for storing water and
keeping a portion of these lands operational, but there may be opportunities to
develop them in other ways, especially as people flock to new urban centers
and housing there becomes scarce.