A Cost-Benefit Analysis of Watershed Rehabilitation: A Case Study in Farta Woreda, South Gondar, Ethiopia

Abstract

In addressing land degradation, a number of watershed rehabilitation programs have been carried out in Ethiopia. This study aims to financially quantify watershed rehabilitation in a way that incorporates major costs and returns. We also construct scenarios to portray cost-benefit information about the future. The data were obtained from a physical survey and supplemented with secondary sources. Total cost and return values for the watersheds were compared monetarily through cost-benefit analysis and these values were extrapolated to the future. The results indicate that the benefit was Ethiopian Birr 918,049 and 4,651,167 (US$73,821 and US$374,008) for the smallest and largest of the rehabilitated watersheds, respectively, while the expenditure was Birr 154,178 and 205,712 (US$17,701 and US$23,620). Under optimal management in the future, these benefits can reach up to Birr 19,334,643 and 76,699,254 (US$2,219,821 and US$8,805,884), while the costs remain the same. The results clearly indicate that investment in watershed rehabilitation may be an economically viable short-term and long-term proposition. Hence there is a strong case for sustainable management of rehabilitated watersheds in view of the very high economic benefits from the rehabilitation.