Transboundary river basins cover 62percent of Africa's total area and, with the exceptionof island states, every African country has at least oneinternational river in its territory. Thus, transboundarywater governance in Africa is central to any national orregional water strategy and any economic, poverty reduction,and environmental strategy. Despite the potential payofffrom water cooperation, forging meaningful agreements forshared water management faces numerous challenges.Impediments to negotiated cooperation include differences inup- and downstream views on water rights and histories ofwater use; negotiating philosophies focused on the beliefthat water is a zero-sum game; geographic and politicalpower differentials that conflict with basin-wide solutions;and uncertainty over basic water resources data thatincrease the perceived risks of cooperation. For cooperationto occur, riparian states, other stakeholders, and thefacilitators of negotiation must be aware of the possiblebenefits of cooperation, whether benefit distribution willbe shared, and what pathways are most likely to overcomepotential barriers to negotiation. Economic theory andempirical analysis can play a productive role in providingthe necessary information. This paper provides a review ofthe challenges to transboundary water cooperation, pathwaysfor overcoming those challenges, and the role of economicsin facilitating the discovery of those pathways. While it iswritten to focus on African transboundary waters, the reportdraws from broader transboundary water literature.Appendices include case studies on both game theory andhydro-economic analysis in transboundary cooperation forseveral river basins, including some from Africa. Thelimited studies that have quantified the gains fromcooperation or costs of noncooperation show that thepotential benefits are substantial. Recognizing thepotential gains and costs for all parties provides amotivation for cooperation. The likelihood of cooperationaround river basins is minimal if cooperation does notbenefit the respective actors involved. In the finalanalysis, cooperation should be voluntary based on theself-interest of riparian states.