Ethiopia: Cost effective options for inclusive and sustainable development

Aragie, Emerta; Thurlow, James; Taffesse, Alemayehu Seyoum; Pauw, Karl; and Jones, Eleanor. 2025. Ethiopia: Cost effective options for inclusive and sustainable development. Agrifood Investment Prioritization Country Series Brief 1. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/174466

In this policy brief, we present findings of a systematic evaluation and ranking of investment options for Ethiopia’s agrifood system based on their cost-effectiveness in achieving multiple development outcomes, including agrifood gross domestic product (GDP) growth, agrifood job creation, poverty reduction, declining undernourishment, and lowering diet deprivation. Additionally, the study assesses their environmental footprint, focusing on water consumption, land use, and emissions. Investments in small and medium enterprise (SME) traders and processors are shown to be the most cost effective at driving improvements in social outcomes, like poverty and undernourishment. They are also highly ranked in terms of expanding agrifood GDP and employment. Extension services for livestock, credit for farmers, R&D (agronomy), and safety nets also rank high. However, many cost-effective investments have relatively high environmental footprints, which highlights potential tradeoffs. The study further reveals shifts in the cost-effectiveness ranking of investment options overtime and when extreme production shocks occur.