Impact of Road Infrastructure Development for Economic Growth in Ethiopia

Abstract

This paper examined impact of road infrastructure development on economic growth in Ethiopia. The general specification of the model is an augmented Solow Growth model. Such a model is basically a VAR. The logarithmic form of this production function of Solow growth model allows including road network and good values of export or import in national currency per total road length variables which impact for growth of GDP. Vector auto regressive model (VAR) use analyzes the secondary data for the long run relationship between road infrastructure development and economic growth in Ethiopia. The study is making use of time series data for the period 1975 to 2017. The data used is from secondary data sources such as central statistics agency, World Bank, IMF, MOFED, and African Development Bank (ADB). The objective of the study is the impact of the road infrastructure development for economic in Ethiopia. The result shows that road infrastructure development for asphalt road, gravel road, road density per 1000 km2 and export of goods values per total road length in national currency have a positive impact with economic growth in the long run. And also in the same result that total road length per 1000 persons (labour force) and importing goods values per total road length in national currency shows a negative impact on economic growth in the long run. Based on the findings, it was suggested that the government should come up with sustainable and implementable road infrastructure development for economic growth. Maintenance Road Sector Development Program (RSDP) that will ensure good access road network in Ethiopia. Also, economic growth in Ethiopia depended on the level of good and accessible road network is increasing transportation and facilitates for exporting goods (economic activity)