Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa

59 Pages Posted: 20 Apr 2016

See all articles by Piet Buys

Piet Buys

World Bank - Development Research Group (DECRG)

Uwe Deichmann

World Bank - Development Research Group (DECRG)

David Wheeler

World Bank - Policy Research Department

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2006

Abstract

Recent research suggests that isolation from regional and international markets has contributed significantly to poverty in many Sub-Saharan African countries. Numerous empirical studies identify poor transport infrastructure and border restrictions as significant deterrents to trade expansion. In response, the African Development Bank has proposed an integrated network of functional roads for the subcontinent. Drawing on new econometric results, the authors quantify the trade-expansion potential and costs of such a network. They use spatial network analysis techniques to identify a network of primary roads connecting all Sub-Saharan capitals and other cities with populations over 500,000. The authors estimate current overland trade flows in the network using econometrically-estimated gravity model parameters, road transport quality indicators, actual road distances, and estimates of economic scale for cities in the network. Then they simulate the effect of feasible continental upgrading by setting network transport quality at a level that is functional, but less highly developed than existing roads in countries like South Africa and Botswana. The authors assess the costs of upgrading with econometric evidence from a large World Bank database of road project costs in Africa. Using a standard approach to forecast error estimation, they derive a range of potential benefits and costs. Their baseline results indicate that continental network upgrading would expand overland trade by about $250 billion over 15 years, with major direct and indirect benefits for the rural poor. Financing the program would require about $20 billion for initial upgrading and $1 billion annually for maintenance. The authors conclude with a discussion of supporting institutional arrangements and the potential cost of implementing them.

Keywords: Transport Economics Policy & Planning, Common Carriers Industry, Rural Roads & Transport, Transport and Trade Logistics, Economic Theory & Research

Suggested Citation

Buys, Piet and Deichmann, Uwe and Wheeler, David, Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa (December 1, 2006). World Bank Policy Research Working Paper No. 4097. Available at SSRN: https://ssrn.com/abstract=951870

Piet Buys (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-522-3230 (Fax)

Uwe Deichmann

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

David Wheeler

World Bank - Policy Research Department ( email )

1818 H Street N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/dwheeler

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