Ethiopian Develpment Research Institute (EDRI and International Food Policy Research Institute (EDRI/IFPRI) Seminar Series, 20-Jul-10

9. Key Research Findings (5) Source: The dynamic CGE model for Ethiopia Growth led by: Cereals Export agriculture Livestock All agriculture Non agriculture Total labor-GDP growth elasticity -0.02 0.15 0.11 0.06 0.10 Poverty-growth elasticity -1.40 -1.16 -1.16 -1.41 -1.05 Growth multipliers 1.13 1.04 1.06 1.03 1.06 % Contribution to growth multipliers Own sector 88.3 96.5 94.0 Agriculture 10.3 0.3 2.6 Nonagriculture 1.4 3.2 3.4

27. Key Findings - SIO Model Teff Maize Coffee Livestock (Cattle) Thread and Yarn Constru-ction Shock: Output 1 1 1 1 1 1 Change in Incomes Rural poor 0.40 0.38 0.20 0.51 0.20 0.21 Rural non-poor 0.76 0.82 1.02 0.78 0.36 0.39 Urban poor 0.04 0.04 0.05 0.04 0.11 0.08 Urban non-poor 0.17 0.17 0.21 0.18 0.29 0.31 Change in GDP - total 1.42 1.47 1.54 1.56 1.01 1.08 Change in GDP – ind. 0.59 0.60 0.72 0.62 0.58 0.83 % due to consumption linkages 88 90 79 92 66 47 % due to indirect production linkages 12 10 21 18 34 53

39. Relationship between Poverty and Growth Note: Income is measured in constant birr Sources: Authors’ calculation using data from MOFED for poverty and World Bank for income Annual change (%) 1995/96 1999/00 2004/05 96-00 00-05 96-05 GDP pc 937 1,017 1,219 1.66 3.69 2.67 Agricultural GDP pc 474 474 532 0.03 2.33 1.17 Nonagricultural GDP pc 463 543 687 3.24 4.83 4.03 National poverty rate (%) 45.5 44.2 38.5 -0.58 -2.62 -1.61 Poverty-growth elasticity -0.35 -0.71 -0.60

40. Base-Run Result of DREM National economy Agriculture Cereals Export crops Non-agriculture Annual growth rate, 2009-2015 (%) GDP 6.1 4.2 4.8 5.0 7.5 Total labor 2.7 2.3 2.2 1.8 3.1 Land 3.4 3.4 2.6 4.7 Capital 5.0 2.8 5.7 TFP 1.6 1.3 2.3 0.0 1.7 Contribution to growth, 2009-2015 average (%) Total labor 13.8 18.7 23.3 5.6 11.3 Land 10.7 30.6 26.9 95.4 Capital 47.3 19.1 63.6 TFP 28.2 31.6 49.8 25.1

42. Growth Rate of DREM Scenario Result Growth led by Base-run Cereals Export agriculture Livestock All agriculture Non agriculture Combined GDP 6.1 6.3 6.2 6.3 6.8 7.2 7.8 AgGDP 4.2 4.8 4.5 4.7 5.9 4.4 6.0 Cereals 4.8 6.6 4.8 4.8 6.7 4.8 6.7 Export crops 5.0 5.0 7.6 5.0 7.6 5.0 7.6 Livestock 3.9 4.0 3.9 5.6 5.7 4.0 5.8 NonagGDP 7.5 7.5 7.5 7.5 7.5 7.6 9.2 Manufacturing 7.7 7.6 7.7 7.8 7.7 9.7 10.0 Agro-processing 6.9 6.9 7.0 6.9 7.1 8.4 8.7 Private services 8.0 8.0 8.0 8.0 8.1 10.0 10.0

45. Price Effect in DREM – Negative Side (1) Price indices (2015, base-run=1) Growth led by: Cereals Export agriculture Livestock All agriculture Non agriculture Combined Teff 0.92 1.01 1.02 0.96 1.06 1.02 Barley 0.87 1.01 1.02 0.91 1.06 0.97 Wheat 0.84 1.01 1.02 0.88 1.06 0.93 Maize 0.85 1.01 1.03 0.89 1.07 0.96 Sorghum 0.90 1.01 1.03 0.95 1.07 1.02 Oilseeds 1.00 0.99 1.02 1.00 1.05 1.06 Coffee 1.00 0.96 1.02 0.97 1.05 1.02 Poultry 1.00 1.01 0.91 0.92 1.09 1.01 Milk 1.00 1.01 0.89 0.91 1.09 0.99 Meat products 1.00 1.03 0.98 1.01 0.99 1.00 Dairy products 1.00 1.01 0.90 0.91 1.09 0.99 Grain milling 0.99 1.00 1.02 1.02 1.00 1.03 Other food 1.00 0.98 1.03 1.01 0.98 0.99

47. Price Effect in DREM – Negative Side (3) Growth led by: Base-run Cereals Export agriculture Livestock All agriculture Non agriculture Combined Poverty rate by 2015 (%) National 28.6 26.1 28.1 27.9 24.8 27.0 23.9 Rural 29.6 27.0 29.2 29.0 25.6 27.5 24.4 Urban 23.5 22.1 22.9 22.5 20.7 24.5 21.5 Additional number of people out of poverty (comparing 2015 with base-run) National 2,075 422 600 3,194 1,357 3,922 Rural 1,871 328 460 2,799 1,502 3,629 Urban 204 94 140 395 -145 294 GDP growth rate (%) 6.1 6.3 6.2 6.3 6.8 7.2 7.8