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Modeling the economywide effects of water and energy interventions in the face of climate change
The Ethiopian economy relies predominantly on rainfed agriculture for income generation, export earnings, and rural livelihoods. However, the frequency and intensity of extreme ago-climatic events projected by climate scenarios suggest considerable and growing risks from climate change to the country’s agri-food systems and the overall economy. This study assesses the economic impacts of recurrent climate shocks on the Ethiopian economy to 2040. The results indicate that recurrent climate shocks will lead to a reduction in Ethiopia's cumulative GDP from 2020 to 2040 compared to a “no climate change” baseline. Specifically, extreme weather events could cumulatively cost Ethiopia up to 17 percent (or US$ 534.3 billion) in GDP between 2020 and 2040 compared to a no-climate change baseline. The weight of the economic loss is concentrated in the agricultural production sector, with rural households and poorer households in urban areas being worst affected. Strategic investments in irrigation infrastructure and in hydroelectricity generation are found to be effective in mitigating some of the damage caused by recurrent climate variability.
Public investment prioritization for Rwanda’s inclusive agricultural transformation: Evidence from rural investment and policy analysis modeling
As Rwanda is expected to return to its rapid growth trajectory following the COVID-19 pandemic, agriculture will continue to play a central role in the structural transformation of the entire economy. To this end, the Government of Rwanda continues to invest in the agricultural sector by building on Strategic Plans for the Transformation of Agriculture (PSTAs) that began in the early 2000s. The challenging question is how to prioritize public expenditures across a broad portfolio of policies and programs. Ambitious plans, whether in the short or long term, require difficult decisions. The prioritization of public investment becomes even more complex as Rwanda’s structural transformation ad...
The economywide effects of reducing food loss and waste in developing countries
One of the Sustainable Development Goals (SDGs) is reducing food loss and waste (FLW) across all stages of food value chains, including the on-farm production, the off-farm postharvest, processing, and distribution, and the household consumption stages. We employ general equilibrium models for Bangladesh, Kenya, and Nigeria to assess the economywide implications of reducing FLW at different stages of value chains. Halving FLW results in GDP increases of between 1.1 and 2 percent, with up to 13 million people lifted out of poverty across the three countries. Diets also improve – especially in Kenya and Nigeria – due to greater availability and lower prices of healthy foods such as fruits ...
Modeling crop-livestock interactions in semi-subsistence economies
Climate and weather shocks pose significant threats to crop-livestock systems, leading to economic losses and humanitarian crises. Utilizing a modeling framework that innovatively integrates the crop and livestock systems, this study examines the interactions and dynamic adjustments within these systems following weather shocks, using Ethiopia as a case study. We also evaluate the effectiveness of various adaptation strategies in sustaining farm incomes, food security, and welfare. Results show unique effects on the crop and livestock sectors resulting from a joint shock on the two systems. While food crops experience a strong and immediate growth effect that fades quickly, the livestock sec...
Assessing the economywide impacts of COVID-19 on Rwanda’s economy, agri-food system, and poverty: A social accounting matrix (SAM) multiplier approach
Rwanda’s policy response to COVID-19 has been widely praised for its rapid, systematic, and comprehensive approach to containing the pandemic. Although the economic consequences are unavoidable, the country expects to return its economy to its high-growth trajectory as the pandemic subsides. We use economic modeling tools designed to estimate the short-term economywide impacts of the unanticipated, rapid-onset economic shocks of COVID-19 on Rwanda. - Results show that during the six-week lockdown that began in March, Rwanda’s GDP fell 39.1 percent (RWF 435 billion; USD 484 million) when compared to a no-COVID situation in the same period. - Results further show that Rwanda’s GDP in 202...
Prioritizing agri-food system investments under climatic and world price risks
With a population exceeding 120 million, Ethiopia is home to 77 million people who directly depend on agriculture for their livelihoods (World Bank, 2024a). The country registered robust agricultural growth of about 5% on average for a decade since 2013 (NBE, 2023). The Ethiopian government has been encouraged to target its development interventions to sustain and accelerate the growth and transformation of the economy (IFAD, 2023; Aragie & Balié, 2019). However, the pattern of support and the composition of growth are critical factors influencing changes in poverty, employment, and diet quality (Christiaensen & Martin, 2018; Pham & Riedel, 2019). Assessing the linkages between economic gro...
Assessing the impacts of COVID-19 on household incomes and poverty in Rwanda: A microsimulation approach
In Rwanda, as in other countries, different types of households will experience the economic effects of the COVID-19 pandemic differently. We use a microsimulation approach to highlight the importance of these differences and to draw attention to the diversified livelihood strategies of Rwandan households in order to fully understand COVID-19’s impacts on their income and poverty status. Our approach complements macro-level assessments of COVID-19’s economic impacts, focusing on the contribution of the income sources, asset holdings, and location (urban/rural) of households to understanding these differential effects.
The short-term impact of COVID-19 on Ethiopia’s economy through external sector channels: An economywide multiplier model analysis
The COVID-19 pandemic is expected to considerably affect the Ethiopian economy directly and indirectly due to global shocks and to the different restrictive preventative measures the country is taking. We analyze these economic effects using multisector economywide income multiplier models built on the two latest Social Accounting Matrices (SAMs) developed for Ethiopia. Three external sector channels are the focus of the analysis: commodity exports, strategic imports, and remittances. Results indicate that in the absence of any policy responses, the Ethiopian economy is expected to experience a loss of approximately 4.3 to 5.5 percent of its annual GDP due to exports, strategic imports, and ...
Linked Economic and Animal Systems (LEAS) Model: Technical documentation
The herd dynamics model (HDM) component of the Linked Economic and Animal Systems (LEAS) model specifically documented here is developed in the context of the Feed the Future Innovation Lab for Livestock Systems financed by the United States Agency for International Development (USAID) and managed by the University of Florida’s Institute of Food and Animal Sciences. The main objective of this project is to develop a comprehensive analytical approach or systems model capable of assessing (i) how animal herd or flock sizes change over time and in response to on-farm policies; (ii) how alternative national trends and policies affect future development of the livestock system as a whole; (iii)...
Assessing investment priorities for driving inclusive agricultural transformation in Tanzania
This study utilizes a recursive dynamic general equilibrium model calibrated with data for Tanzania to explore the link between agricultural and rural development spending and four development outcomes: economic growth, job creation, poverty reduction, and diet quality. Results show that no single expenditure option is the most effective in achieving all four desired development outcomes for Tanzania. Productivity-enhancing agricultural interventions in horticulture are effective at generating growth in the agri-food system (AFS) and improving diets, but have a limited effect on employment. Supporting cereal producers has large effects on growth and poverty reduction, with relatively high re...
