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Long-term economy-wide impacts of the Grand Ethiopian Renaissance Dam on Sudan

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  • Siddig, Khalid
  • Basheer, Mohammed
  • Luckmann, Jonas
  • Grethe, Harald

Abstract

The Grand Ethiopian Renaissance Dam (GERD) – a multi-year hydropower storage dam under construction on the Blue Nile River in Ethiopia – is expected to double the Ethiopian electricity generation. The GERD is expected to impact downstream water users in Egypt and Sudan. Several studies assessed the effects of the GERD on water supply and hydropower generation in Sudan and Egypt. However, less attention was given to the economic benefits and costs of GERD operation to the downstream countries. This study analyzes the potential impacts of the steady-state operation of the GERD on Sudan and provides recommendations for short- and medium-term policymaking. We feed a calibrated economy-wide Computable General Equilibrium (CGE) model of Sudan with the expected biophysical impacts of the steady-state operation of the GERD on irrigated agriculture and hydropower generation in the country. The biophysical impacts are obtained from daily hydrological, water allocation, and crop models. We assess three cooperation states between Ethiopia and Sudan on the operation of the GERD: unilateral action, coordination, and collaboration. These cooperation states are examined considering irrigation expansion in the Blue Nile Basin in Sudan based on three possible cropping patterns. The analysis also considers the expected changes to hydropower generation in Sudan. Results suggest that Sudan's accumulated GDP gains from the steady-state operation of the GERD (2020—2060) would range between US$ 27 billion and US$ 29 billion compared to a baseline without the GERD. Results on household welfare for 2020 to 2060 show disparities between the gains of different household groups. High levels of cooperation between Ethiopia and Sudan on the steady-state operation of the GERD can lead to less economic gains if combined with certain cropping patterns in new irrigation schemes compared to lower levels of cooperation.

Suggested Citation

  • Siddig, Khalid & Basheer, Mohammed & Luckmann, Jonas & Grethe, Harald, 2019. "Long-term economy-wide impacts of the Grand Ethiopian Renaissance Dam on Sudan," Conference papers 333118, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugtwp:333118
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    References listed on IDEAS

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    1. Siddig, Khalid & Elagra, Samir & Grethe, Harald & Mubarak, Amel, 2016. "A Post-Separation Social Accounting Matrix for the Sudan," Working Paper Series 244286, Humboldt University Berlin, Department of Agricultural Economics.
    2. Kevin G. Wheeler & Mohammed Basheer & Zelalem T. Mekonnen & Sami O. Eltoum & Azeb Mersha & Gamal M. Abdo & Edith A. Zagona & Jim W. Hall & Simon J. Dadson, 2016. "Cooperative filling approaches for the Grand Ethiopian Renaissance Dam," Water International, Taylor & Francis Journals, vol. 41(4), pages 611-634, June.
    3. Nigatu, Getachew & Dinar, Ariel, 2016. "Economic and hydrological impacts of the Grand Ethiopian Renaissance Dam on the Eastern Nile River Basin," Environment and Development Economics, Cambridge University Press, vol. 21(4), pages 532-555, August.
    4. Calzadilla, Alvaro & Rehdanz, Katrin & Tol, Richard S.J., 2011. "The GTAP-W model: Accounting for water use in agriculture," Kiel Working Papers 1745, Kiel Institute for the World Economy (IfW Kiel).
    5. Marc Jeuland & Xun Wu & Dale Whittington, 2017. "Infrastructure development and the economics of cooperation in the Eastern Nile," Water International, Taylor & Francis Journals, vol. 42(2), pages 121-141, February.
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