Farmers in Kafr Hamouda village, about 100 kilometres north-east of Cairo, Egypt, use a plough that helps reduce water consumption, only a quarter of which is absorbed by crops using traditional practices. Amr Nabil / Associated Press
Farmers in Kafr Hamouda village, about 100 kilometres north-east of Cairo, Egypt, use a plough that helps reduce water consumption, only a quarter of which is absorbed by crops using traditional practShow more

Egypt ploughs away at water shortages in bid to avert a crisis



KAFR HAMOUDA, EGYPT // “For a thousand years,” Abdullah Sheikh’s family has been working the land the same way — flooding fields in Egypt’s Nile delta and planting seeds by hand.

But now, a small, relatively cheap plough has changed that, allowing him to nearly double the yields of his nearly one hectare of wheat, arranging it in neat, raised beds with smaller furrows that require a third less water.

“It saves us much labour, seeds and effort,” Mr Sheikh said, calling it a “blessing” for his family, eight of whom help work the plot.

The plough could help Egypt alleviate water shortages that threaten to cripple the Arab world’s most populous country in the next decade. Several groups are offering technologies and techniques to conserve the precious resource — only a quarter of which is absorbed by crops — but time is running out.

Egypt has relied on the Nile, Africa’s largest river, since the time of the pharaohs. For thousands of years, annual floods dumped rich silt on the banks, allowing the country to serve as a Mediterranean grain reserve.

But the annual flood ended with the completion of the Aswan High dam in 1970, and surging population growth has transformed Egypt — with over 90 million citizens — into the world’s largest wheat importer.

Water is already considered “scarce” in Egypt, and it expects its per capita annual supply to fall below the 500-cubic-metre threshold that denotes “absolute scarcity” under international norms by 2025, from some 600 cubic metres today. Salinisation caused by rising sea levels could also reduce future supply.

President Abdel-Fattah el-Sissi said earlier this year that water was being provided too cheaply. Since then, household water costs have doubled or even tripled, according to bills Egyptian have been posting on social media.

Meanwhile, Ethiopia is building a dam and hydroelectric plant upstream that Egypt worries will reduce its share of the Nile. The two nations are discussing ways to fill the planned water reserve slowly so as to limit the effect, but so far Ethiopia is pressing ahead with construction without a detailed agreement.

“It’s like watching a slow-moving train wreck. Everyone knows that population growth is accelerating, and then you have that dam, which could be a problem if it’s filled up too fast,” said Richard Tutwiler, a water expert at the American University in Cairo. “There are some intelligent, highly skilled people in the ministries and the water sector, but there’s room for better coordination, and taking more of a community approach when it comes to improving crop irrigation.”

Successive governments have recognised the need for action, but policies have not kept up with surging demand. Pumping stations and distribution networks are notoriously inefficient, and water cuts in the summer months are common in Cairo. Droughts hit some rural areas in the summer, and new neighbourhoods built in the desert often lure residents with promises of infrastructure — including water — that never materialise.

One such area is New Gurna, built on the west bank of the city of Luxor, famed for its pharaonic temples and tombs. Residents there complain they go days without water, with pressure sometimes returning for only a few hours a week.

“If I knew it was going to be this bad, I wouldn’t have moved out here,” said high schoolteacher Abdullah Said, who has been leading a campaign representing 15,000 residents urging the government to fix their problem.

The land has been used to resettle villagers kicked out of homes that had been built over archaeological sites generations ago, which the state demolished for fear they could damage the sites. Residents say the local reservoir leaks and showed videos of water gushing through a ravine near the site. Local officials deny there is a problem.

Other groups are trying to address the shortages as well, with a wide variety of donors — from the European Union to Microsoft founder Bill Gates — involved in the effort. The government has a number of initiatives to recycle water and improve efficiency, but none have been able to keep up with demand.

The small plough that has transformed Sheikh’s land in the Nile Delta could have a major effect in a country where the vast majority of farming is done on small plots. It is manufactured locally and sells for just $5,000.

“My own father opposed switching from our old ways, but when he saw the savings he was convinced,” said Atef Swelam, the scientist who developed the plough on behalf of the International Centre for Agricultural Research in the Dry Areas (ICARDA). “Raised beds are difficult to make manually and are expensive, but with this machine it’s simple.” Only 35 ploughs have been built so far, but Swelam hopes that number will increase through public and private investment.

The UN Food and Agriculture Organization (FAO), which is helping develop the plough system, hopes the government will encourage the creation of small- and medium-sized businesses to build more.

“Then it would be self-propelling,” said Pasquale Steduto, the FAO representative in Egypt. Action is needed in order to conserve and manage water resources, otherwise “competition between users could create internal conflict ... or conflict with other nations,” he said.

Sprinkler systems and underground irrigation — which minimise evaporation — are also being pitched, but their high cost has made the government reluctant to include them in the national water plan.

Mazen Mostafa, an irrigation engineer, thinks the focus should be on transforming Egypt’s ageing canals into sprinkling networks, which could expand the green areas along the Nile.

“That system is thousands of years old and hasn’t been changed since the time of the pharaohs,” he said. “Our idea is to bring in investors to modernise the canal system on the old lands into a sprinkler system, then expand that to create new arable land for them to farm.”

“Now it’s not just a matter of investment opportunities, it is a must, given the coming shortages,” he said.

*Associated Press

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

WHY AAYAN IS 'PERFECT EXAMPLE'

David White might be new to the country, but he has clearly already built up an affinity with the place.

After the UAE shocked Pakistan in the semi-final of the Under 19 Asia Cup last month, White was hugged on the field by Aayan Khan, the team’s captain.

White suggests that was more a sign of Aayan’s amiability than anything else. But he believes the young all-rounder, who was part of the winning Gulf Giants team last year, is just the sort of player the country should be seeking to produce via the ILT20.

“He is a delightful young man,” White said. “He played in the competition last year at 17, and look at his development from there till now, and where he is representing the UAE.

“He was influential in the U19 team which beat Pakistan. He is the perfect example of what we are all trying to achieve here.

“It is about the development of players who are going to represent the UAE and go on to help make UAE a force in world cricket.”