The construction of the Grand Ethiopian Renaissance Dam by the Ethiopian Government has created a diplomatic situation between Egypt and Ethiopia with Egypt frothing at the mouth citing a 1929 agreement that was designed by the British. This agreement has been faulted and resisted by the upstream countries from which the Nile originates.
The countries of the great lakes region including Kenya, Uganda and Ethiopia have signed the Cooperative Framework Agreement that effectively nullifies the 1959 agreement that awarded Sudan and Egypt the lions share of the Nile waters.
The genesis of this awkward arrangement is not that difficult to understand with the benefit of historical hindsight. The British controlled most of East Africa and with Egypt being strategic to them granting the territory most of the Niles waters was doable seeing as the climates of the countries from which the Nile originates could (at the time) function without the Niles tributaries.
The argument by the Egyptians is that the drop in water levels will threaten their national security and food security for its citizens. The argument is rather strange what with the total lack of concern for the well being of the upstream countries and ther peoples plight. I however suspect that the water is only the tip of the proverbial iceberg. Egypt is a major exporter of Horticultural produce and other agricultural products such as their world famous cotton sheets. Being mostly a desert this is a rather impressive feat and it is all due to its reliance on the Nile.
The Nile however delivers more than just life giving water. Tonnes of silt washed from the Ethiopian highlands has for millenia flooded the low lying valleys of Egypt and provided much needed nourishment that has been the bedrock of agriculture in the region. The constant flow of the Nile has ensured steady delivery of silt and made the Pharaonic land dependent on the annual silt. The Aswan high Dam is slowly being choked by this silt and the resultant wastage of water by evaporation is not helping matters. The wastage of water by Egyptian irrigation methods and the reduction of silt to a trickle by bigger upstream dams may be the reason that the Egyptian government is getting jittery.
With the British long gone, their former colonies have been left with unfriendly agreements that are creating complex tensions. The way out is only through compromise in my opinion because the grandstanding and threats of military action are a bad idea any way you slice it.