ADDIS ABABA - A new study reveals that the amount of investment required for Ethiopia to recover from the devastation of the two-year northern war could be upwards of USD 44 billion.

The study was conducted by experts at the International Food Policy Research Institute (IFPRI), International Livestock Research Institute (ILRI), and Ethiopian Policy Studies Institute (PSI). The researchers presented their papers during a conference under the theme ‘Rebuilding Livelihoods in Conflict-Affected Communities in Ethiopia’ organized at the ILRI campus in Addis Ababa’s Gurd Shola neighborhood on May 29, 2024.

Several research papers on the depth of the consequences of conflict in Ethiopia, including effects on the economy, casualties, livelihoods, and communities, were presented. Experts presented estimates for damages computed for the period between 2020 and 2022, which does not include estimates for damages caused by conflicts that have erupted since in the Amhara and Oromia regions.

The research took into account destruction, disruptions, diversions, and dissaving, and economic loss calculations were conducted based on Computable General Equilibrium (GCE).

The data reveals that, based on reported damage, Ethiopia lost 7.5 percent of its GDP to the conflict. Another scenario, which is calculated based on reported damage in addition to upward adjustments, estimates that the losses may have been as high as 12 percent of GDP.

Private consumption dropped by 8.3 percent or 15.3 percent, depending on the method used for calculation.

Experts said that in the Tigray, Amhara and Afar regions, the destruction of human, physical and natural resources, disruption of normal order of businesses including movement of goods and people, and provision of services due to breakdown of infrastructure and insecurity had reached an all-time high in recent years.