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Road network upgrading and overland trade expansion in Sub-Saharan Africa

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  • Buys, Piet
  • Deichmann, Uwe
  • Wheeler, David

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 allSub-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.

Suggested Citation

  • Buys, Piet & Deichmann, Uwe & Wheeler, David, 2006. "Road network upgrading and overland trade expansion in Sub-Saharan Africa," Policy Research Working Paper Series 4097, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4097
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    References listed on IDEAS

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    Cited by:

    1. Shepherd, Ben & Wilson, John S., 2006. "Road infrastructure in Europe and Central Asia : does network quality affect trade ?," Policy Research Working Paper Series 4104, The World Bank.
    2. Steven Haggblade, 2013. "Unscrambling Africa: Regional Requirements for Achieving Food Security," Development Policy Review, Overseas Development Institute, vol. 31(2), pages 149-176, March.
    3. de Melo, Jaime & Tsikata, Yvonne, 2014. "Regional integration in Africa: Challenges and prospects," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    4. Bonfatti, Roberto & Poelhekke, Steven, 2017. "From mine to coast: Transport infrastructure and the direction of trade in developing countries," Journal of Development Economics, Elsevier, vol. 127(C), pages 91-108.
    5. Jaime MELO DE & Céline CARRERE & John WILSON, 2009. "The Distance Effect and the Regionalization of the Trade of Low-Income Countries," Working Papers 200908, CERDI.
    6. Brown, Molly E. & Carr, Edward R. & Grace, Kathryn L. & Wiebe, Keith & Funk, Christopher C. & Attavanich, Witsanu & Backlund, Peter & Buja, Lawrence, 2017. "Do markets and trade help or hurt the global food system adapt to climate change?," Food Policy, Elsevier, vol. 68(C), pages 154-159.
    7. Maarten Bosker & Harry Garretsen, 2012. "Economic Geography and Economic Development in Sub-Saharan Africa," World Bank Economic Review, World Bank Group, vol. 26(3), pages 443-485.
    8. Bo Xiong & John Beghin, 2013. "Aflatoxin redux: Does European Aflatoxin regulation hurt groundnut exporters from Africa?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 40(5), pages 895-895, December.
    9. Bo Xiong & John Beghin, 2017. "Does European aflatoxin regulation hurt groundnut exporters from Africa?," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 16, pages 287-307 World Scientific Publishing Co. Pte. Ltd..
    10. Yann Duval & Chorthip Utoktham, 2009. "Behind the Border Trade Facilitation in Asia-Pacific: Cost of Trade, Credit Information, Contract Enforcement and Regulatory Coherence," Working Papers 6709, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    11. Iimi, Atsushi, 2007. "Infrastructure and trade preferences for the livestock sector : empirical evidence from the beef industry in Africa," Policy Research Working Paper Series 4201, The World Bank.
    12. Céline Carrère & Jaime de Melo & John Wilson, 2013. "The Distance Puzzle And Low-Income Countries: An Update," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 717-742, September.
    13. Eifert, Benn & Gelb, Alan & Ramachandran, Vijaya, 2008. "The Cost of Doing Business in Africa: Evidence from Enterprise Survey Data," World Development, Elsevier, vol. 36(9), pages 1531-1546, September.
    14. Shepherd, Ben & Wilson, John S., 2009. "Trade facilitation in ASEAN member countries: Measuring progress and assessing priorities," Journal of Asian Economics, Elsevier, vol. 20(4), pages 367-383, September.
    15. Calì, Massimiliano & te Velde, Dirk Willem, 2011. "Does Aid for Trade Really Improve Trade Performance?," World Development, Elsevier, vol. 39(5), pages 725-740, May.
    16. World Bank & International Finance Corporation, 2006. "Doing Business 2007 : How to Reform," World Bank Publications, The World Bank, number 7245, June.
    17. Charles Kunaka & Robin Carruthers, 2014. "Trade and Transport Corridor Management Toolkit," World Bank Publications, The World Bank, number 18241, June.

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    Keywords

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

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