Many African water-related conflicts have their roots in so-called colonial treaties. This article examines the dispute between Egypt and Ethiopia regarding the construction and operation of an Ethiopian dam at the headwaters of the River Nile. We start by reviewing these countries' current political and economic circumstances as a prerequisite to assessing the severity of the conflict. We then trace the dispute back to the treaties used by each country to prove its rights to the Nile's water. We identify political circumstances that provide hidden motives behind the stalled negotiations. We conclude that current bilateral economic and political circumstances push decision makers away from reaching a concrete settlement of the dispute and argue that the treaties are only worsening the situation. Cooperation in the field of development in general is required to break the current deadlock, strengthen Egyptian-Ethiopian relations, and promote regional prosperity.