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Road Sector Development and Economic Growth in Ethiopia

Author

Listed:
  • Ibrahim Worku

    (Ethiopia Support Strategy Program II – International Food Policy Research Institute)

Abstract
The study attempts to see the trends, stock of achievements, and impact of road network on economic growth in Ethiopia. To do so, descriptive and econometric analyses are utilized. From the descriptive analysis, the findings indicate that the stock of road network is by now growing at an encouraging pace. The government?s spending has reached tenfold relative to what it was a decade ago. It also reveals that donors are not following the footsteps of the government in financing road projects. The issue of rural accessibility still remains far from the desired target level that the country needs to have. Regarding community roads, both the management and accountancy is weak, even to analyze its impact. Thus, the country needs to do a lot to graduate to middle income country status in terms of road network expansion, community road management and administration, and improved accessibility. The econometric analysis is based on time series data extending from 1971-2009. Augmented Cobb-Douglas production function is used to investigate the impact of roads on economic growth. The model is estimated using a two-step efficient GMM estimator. The findings reveal that the total road network has significant growth spurring impact. When the network is disaggregated, asphalt road also has a positive sectoral impact, but gravel roads fail to significantly affect both overall and sectoral GDP growth, including agricultural GDP. By way of recommendation, donors need to strengthen their support on road financing, the government needs to expand the road network with the aim of increasing the current rural accessibility, and more attention has to be given for community road management and accountancy. Lastly, gravel road expansion has to be made to meet the target level of the road network and simultaneously ascertain rural accessibility, thereby improving agricultural productivity and market access of the poor rural population.

Suggested Citation

  • Ibrahim Worku, 2011. "Road Sector Development and Economic Growth in Ethiopia," Working Papers 004, Policy Studies Institute.
    • Handle: RePEc:etd:wpaper:004
    as

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    File URL: http://www.mtdedri.org/RePEc/etd/wpaper/EDRI_WP004_Road_Sector_Development.pdf
    File Function: First version, 2011
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Wassie, Solomon Bizuayehu, 2017. "Long Run Determinants Of Cereal Production In Ethiopia: Does Co2 Emission Matter?," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 5(2), April.
    2. Jonathan Demenge & Rossella Alba & Katharina Welle & Kebede Manjur & Alemu Addisu & Lyla Mehta & Kifle Woldearegay, 2015. "Multifunctional Roads," Journal of Infrastructure Development, India Development Foundation, vol. 7(2), pages 165-180, December.
    3. Elena Perra, & Sanfilippo, Marco & Sundaram, Asha, 2022. "Roads, Competition, and the Informal Sector," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202221, University of Turin.
    4. Barnaba Trinca, 2022. "Disuguaglianza E Microfinanza Ai Tempi Del Covid," Working Papers - Economics wp2022_01.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    5. Birouke Tefera & Frehiwot Worku & Zewdu Ayalew, 2012. "Implications of Oil Price Shocks and Subsidizing Oil Prices to the Ethiopian Economy: A CGE Analysis," Working Papers 008, Policy Studies Institute.

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