Towards sustainable road financing in Ghana.

Road transport is the dominant transport mode in most developing countries and carry well over 90% of domestic freight and passenger traffic. Road transport is therefore a major asset and plays a significant role in the socio-economic development of these countries. Despite this, roads in developing countries are grossly under funded. They are thus poorly maintained with the result that a large percentage of the networks has deteriorated to the point where massive rehabilitation and reconstruction would have to be carried out if the road networks are to be able to support the desired economic growth. It is unlikely that Governments would be able to increase the present funding levels significantly. External sources of support for road maintenance are also expected to reduce with competition from the recent democracies in Eastern Europe. Innovative ways must therefore be devised to fund road maintenance and rehabilitation/reconstruction. In Ghana, the road sector is undergoing reform as part of the preparation towards the Highway Sector Investment Program which is also supported by a number of external donors and will cover the period 1996 - 2000. The reforms are aimed at ensuring that by the end of the program the total cost of road maintenance would be covered by an enhanced Road Fund. The policies would ensure that tariffs contributing to the fund are progressively raised with time to an optimum level and properly channelised to the road agencies while at the same time pavement management systems, improved financial accounting and management information systems are put in place by the agencies. Other policies include encouraging private financing through BOT (Build, Operate and Transfer) and MOT (Maintain, Operate and Transfer) schemes to reduce the dependence on central government for road funding. These, it is believed, would ensure sustainable road financing by the year 2000. This paper discusses these reforms and the strategies being developed to ensure that the road sector objectives are realised. (A)