Impacts
of Grand Renaissance Dam on
Economic Development in Ethiopia
By:
Teshome Adugna(PhD)
1. Introduction
A
number of agency such as Oakland
Institute, Anti-dam NGOs, Survival International, International Rivers, and the
Friends of Lake Turkana, and with the support of Human Rights Watch are
doing all possible efforts to stop the construction of hydropower dam in
Ethiopia. I think these organizations will survive and mobilize dollar when
Ethiopian suffer by poverty. But today all Ethiopian has recognized that poverty
is their number one enemy. Due to this fact several efforts have been
undertaken to attack poverty in Ethiopia through sustainable economic
development policies and strategies. One of the activities that have been done
is the contraction of hydropower dam. During the last ten years the country
managed to construct six hydropower dams(Including Gilgel Gibe III) that
provide additional 3331 MegaWatt(MW). The constructions of these dams have increased
the availability of energy supply by close to six fold. To meet the current
annual 34 percent growth rate of energy demand in the country the Government of
Ethiopia (GoE) has started the new dam which is known as Ethiopian Grand Renaissance Dam (EGRD). This
dam expected to produce 6000 MW; it will
be the largest hydroelectric power plant in
Africa when completed, as well as the 10th largest in the world. The
total cost of the EGRD is about $ 4.7 billion which will be covered by Ethiopia
Government and the public at large. The main purpose of this brief article is to
present the impacts of the EGRD on economic development in Ethiopia.
- Impacts
of Ethiopian Grand Renaissances
Dam on Economic Development
One
of the factors that play the broad and wide range in the economic development
is the provision of energy supply. The construction of Renaissance dam directly
or indirectly will affect many parts of the economy. The first and the direct
impact of EGRD is to increase the energy supply from current 2000MW to 8000MW.
In other word it increases the Energy supply by 400 percent. This improves the
quality and quantity of energy available in the country. According to various
study a unit percent increase in energy supply increases economic growth by at
least one percent. Therefore, when renaissances dam start operation the
national economy increase by an additional 4 percent. In other word the nation
manages to produce an additional of a billion USD National Products (Output).
The
availability of energy supply increase school enrollment and health service
facility in the country. It facilitates the application of modern technology in
health and education sector that increase health and education coverage and
access in the country. The EGRD provide an additional of two million Euros a
day by selling electricity to neighboring
countries. Such benefit of the dam diversifies export earnings of the
country and at the same time reduces the shortage of foreign reserve. It provides
employment opportunity that increases the welfare of the nations at large.
Currently more than 5000 people are working in EGRD. When the project completed
it facilitate for the establishment of different types of enterprises that
provide more employment opportunity in the future. In addition to providing
employment opportunity it contributes for the structural change of the
industrial sector in the country. It also improves the water storage capacity
of the country. When the project completed the dam will hold up to 62-67 billion cubic meters of water, which increase the
current water storage capacity of the country by more than 100 percent.
- Summary
According to the latest World Bank report, Ethiopia is paving
the way to join the middle income by 2020. In order to maintain such economic
development the country must maintain proper and efficient utilization of its rich
natural resource. Ethiopia white gold is water that provides various
contributions for economic development. The construction of EGRD offer a number
of impacts on the Ethiopian economy: increase energy supply, provide additional
foreign currency, increase water storage capacity, regional cooperation/integration
and industrial development. Such contribution of EGRD accelerates the reduction
of poverty in the country. There are no international laws that say Ethiopian
must die in poverty. In all our capacities we have to put all our efforts for
the completion of the EGRD that change the economic structure of the nation for
future prosperity.
