Is life year gained (LYG) estimate suitable for use with the WHO threshold?

DALYs are a measure of disease burden that are calculated as the sum of the years of life lost due to premature mortality and the years of healthy life lost due to disability (i.e. they account for both mortality and morbidity). One DALY can be thought of as one year of "healthy" life lost.

If by “life-year gained (LYG)” you have calculated the averted number of years of life lost (that arise from prevented pre-mature mortality) due to an intervention, this could be an element of the DALYs averted calculation. However, if the intervention has prevented morbidity as well as mortality, then using this approach would be an underestimation of the number of DALYs averted.

I believe that if the majority of the intervention’s health benefits are from prevented pre-mature mortality (and not from prevented morbidity) then a cost per DALY threshold can be used as a proxy as you propose (but this assumption/approximation should be clearly acknowledged!). An alternative would be to also estimate the averted healthy life lost due to disability using the GBD disability weights (i.e also estimating the averted morbidity due to the intervention).

A quick side note: regardless of the approach you take the effects should be discounted into the future.

I would also like to highlight the debate surrounding these WHO GDP thresholds -> particularly that 3 times the per capita GDP being the threshold for an intervention being classed as “cost-effective” may be too high. I personally avoid using them.

Yot has given you good advice. The WHO system you are following is entirely arbitrary. Much better to decide what kind of outcome measure, simple or complex, is best suited both to Ethiopia and to the particuar issue with which you are concerned. Perfection is not necessary so long as it is fit for purpose - i.e. fit and useful to whomever is having to make a decision. I fear I am out of touch with the quite substantial literature on converting outcome measures. However, it is quite possible that the unadjusted measure you seem to be using is reasonably suited to the local situation and decision problem.