ABSTRACT
The study assesses the transboundary economic impacts of the Grand Ethiopian Renaissance Dam (GERD) on the Eastern Nile basin countries using a multi-region multi-sector computable general equilibrium (CGE) modelling framework. The economic effects of the dam in the basin are analysed under three different climatic and hydrological conditions, taking into account both the transient short-term impounding phase and the longer-term operation phase of the dam in a global CGE setting. The results of the analysis demonstrate the significance of the GERD in generating basin-wide economic benefits and improving welfare throughout the Eastern Nile basin. During the impounding stage, the GERD benefits mainly Ethiopia and to some extent Sudan. The GERD impounding inflicts to a certain extent economic costs on Egypt, particularly if this occurs during a sequence of dry years and Sudan decides to increase its level of water withdrawal for irrigation purposes at the same time. When the GERD becomes operational, the negative effects on Egypt’s economy are reversed and the dam is expected to generate substantial economic benefits to all the Eastern Nile countries, although the distribution of these benefits largely favours Ethiopia.
