This document summarizes the key findings from a CGE analysis of alternative financing options for Ethiopia's Growth and Transformation Plan (GTP). The analysis used a dynamic CGE model to simulate scenarios where the GTP is financed through increased foreign savings, household savings, or tax revenues. The results show that achieving the GTP's high growth targets would require much faster productivity growth as well as large foreign investment and borrowing. Mobilizing domestic resources through financial sector reforms and higher savings is also critical but requires further analysis.

1. Ethiopia’s Growth and Transformation Plan: A CGE Analysis of Alternative Financing Options (Preliminary Results) Seneshaw Tameru, Eyasu Tsehaye and Ermias Engida (Ethiopian Development Research Institute, EDRI) Dario Debowicz, Paul Dorosh and Sherman Robinson (International Food Policy Research Institute, IFPRI) EDRI-ESSP2 Seminar April 12, 2011

15. Simulations and Results

19. Simulation Assumptions (cont.) GTP Simulations adjust TFP growth rates by sector, foreign savings, household savings rates and government consumption to hit target growth rates of GDP, total invesment and government spending.

26. Results: Household Incomes