Ethiopia: GERD to Open Up Extra Economic Opportunities for Ethiopia

The Grand Ethiopian Renaissance Dam (GERD) has gone through many ups and downs since its foundation stone was laid on March 03, 2011. It has overcome seemingly impossible obstacles, including diplomatic pressure from the heavens and the earth. Although the Dam was originally planned to be completed within five years at a cost of 80 billion Birr, for various reasons, it has required nine more years and many times more money than the budget allocated for construction.

Nevertheless, Ethiopians, who have not given up, have united their hands and are now on the verge of completing it. As expected, Ethiopians themselves have become the engineers and financial sources for the GERD, which is about to be inaugurated soon.

The Dam, which has gone through many challenges, has become a source of great meaning for Ethiopians. It is a huge project that has united Ethiopians. Not only the government but also economists have emphasized its significant contribution to national economic growth.

Ethiopian Economic Association researcher Molla Alemayehu (PhD) explained that among the many benefits of the Dam, electricity generation is the most important. Energy or power serves as a major input for any sector, whether it is for manufacturing industries or service-providing institutions.

The researcher explained, in Ethiopia, it is common to hear questions about production and productivity. The main reason for this is the long-standing shortage and interruption of electricity. Producers cannot produce at their full capacity if they do not receive the required amount of power supply. Since this situation has been widely complained about, the completion of the Dam will primarily solve the problem by increasing the country’s electricity production.

“The completion of the Dam will significantly increase the country’s power supply,” Mola said. It will eliminate the negative impacts of power shortage and outage in production and productivity.

He said that it will enable millions of citizens to access electricity, and that citizens who receive power supply will also benefit by successfully facilitating their work. Even at the household level, an individual who receives sufficient power supply will be able to complete his work easily and in a short time, and he will be a productive citizen by spending the remaining time on other activities.

Economist Kostantinos Berhetsefa (PhD) expressed the same opinion. He said that the completion of the GERD is a great opportunity for the Ethiopian people and government; the energy generated by the Dam, which will be the first in Africa and the seventh in the world, has many benefits. This energy will bring great benefits to the 60% of Ethiopians who do not have access to electricity. He mentioned that the Dam has many benefits beyond this, and for example, many Ethiopian experts are participating in the construction and that this will be a great potential for future Dam.

According to Dr. Kostantinos, when the water is stored, it greatly changes the local climate for the evaporated water is beneficial to the area.

A large amount of fish can be produced in the area; it can also be used as a major tourist destination. Cities will grow; agro-industries will expand. In particular, the Benishangul-Gumuz region is endowed with an expanse of unused fertile land that can attract many Ethiopians and foreign investors. In addition, livestock development can be expanded around the lake.

Kostantinos believes that since it is possible to expand agriculture around the lake, there will be a great contribution from the sector. Generating electricity will greatly contribute to the expansion of the agro-industry in the area, and when agriculture expands, more work can be done and more job opportunities can be created.

Similarly, Dr. Molla, mentioning that electricity is a reliable resource, said that it can accelerate the growth of industry and agriculture. Providing reliable electricity can boost economic activity by achieving better growth in the industrial and agricultural sectors. When industries have access to electricity, they work at their full potential and increase production and productivity. This in turn, plays a major role in creating greater job opportunities by increasing their demand for labor.

Molla further said that it is possible to increase foreign exchange earnings by exporting electricity beyond domestic use; energy is currently serving as a major resource for most countries. Many countries are turning to different countries to meet their energy needs; Ethiopia will use this opportunity to earn foreign exchange by selling energy to different countries. He also indicated that in addition to the income Ethiopia will receive from countries that are unable to meet their electricity needs on their own; it will be able to create better economic, social and political relations with those countries.

“It is no exaggeration to say that the Grand Ethiopian Renaissance Dam is a major development center in terms of its economic, social and political contribution,” Dr. Kostantinos said; and pointed out that the works carried out around the Dam have a great impact.

He announced that agro-industries will expand in the area, which will open the door for young people to increase their opportunities in the agricultural sector. In the future, by participating in small-scale irrigation projects with water from the lake, there will be ample opportunities for young people to not only seek employment but also become entrepreneurs.

As to him, in addition to agricultural work, industries will expand. Benishangul Gumuz region is an area where about 64% of African bamboo is produced. This creates a favorable environment for the bamboo industry to expand. Since bamboo is strong and light, it can be used to make many household and office furniture. Therefore, it will be easy to attract many investors who will expand bamboo industries in the area.

Ethiopia has been contributing more than 86% of the water of the Nile without using it; others have been using this Ethiopian resource. The work based on this has also created great inspiration and has gained great acceptance among the people. This is why it has been possible to build capacity in the country.

He mentioned that the project would not have reached this level if it had not received public acceptance, and it is necessary to think of a project that can receive public acceptance from end to end.

Molla said that the Dam required a high cost to complete the Dam; no matter how long it took and how much it cost, the Dam is a valuable and significant for Ethiopians in terms of the economic, social and political benefits it will bring.

He also stated that it would send a big message to some Westerners and their supporters who were adamant that Ethiopia could not build the Dam on its own. These entities were working to prevent Ethiopia from receiving significant support in the area of water development. It was significant that Ethiopia is capable to build this huge project with its own resources, knowledge, and technology.