Despite Ethiopia's remarkable economic growth, averaging 9.4% annually, persistent energy poverty has remained a binding constraint on that growth. This study assesses the economy-wide and distributional impacts of the Grand Ethiopian Renaissance Dam (GERD) using a recursive dynamic computable general equilibrium (CGE) model calibrated to Ethiopia's 2022 Social Accounting Matrix. Scenarios incorporating climate variability and political risk are evaluated, and the costs of non-cooperation are explicitly quantified. Under full grid integration and regional cooperation, Ethiopia's GDP increases by 2.1–3.5%, Labour reallocation equivalent to 1.3 million workers across sectors is induced, and annual electricity exports of up to USD 1.2 billion are generated. However, these outcomes are highly conditional: a 30% climate-induced output reduction erodes GDP gains by 40%, while political instability eliminating exports to Sudan reduces export revenues by roughly one-third. The analysis demonstrates that the dam's economic potential is not automatic but fundamentally contingent upon cooperative basin-wide governance, transmission investment, and complementary domestic policies. Transparent operational rules, regional market institutions, and targeted interventions are therefore prioritized by policy to ensure that structural transformation benefits both urban and rural households.
wogene Markos Dumo (Mon,) studied this question.