SSATP Working Paper No. 51

In response to the deteriorating condition of the road network and the high associated economic costs, various stakeholder consultations were held during the 1980s under the umbrella of the Road Management Initiative (RMI), which set the broad outline of a new policy framework for the road sector. The new policy framework advocates establishment of dedicated Road Funds (RFs), managed by autonomous road boards as commercial entities and made up of user representatives who both gain the benefits from the road facilities they provide and bear the cost of any increase in charges which they approve. The issue has been controversial because some see the road funds as a form of earmarking, hampering the optimal allocation of resources, and infringing on requirements of efficient cash and financial management. In contrast, others view road funds as offering a mechanism to insure stable financing of a low profile activity with particularly high rates of return. This paper examines road fund performance in five countries (Benin, Ethiopia, Ghana, Kenya, and Zambia) where reasonably extensive implementation experience exists. The country study is based on three guiding principles: (i) have they improved resource allocation? (ii) have they improved operational efficiency?, and (iii) have they improved road maintenance? Finding of this paper are based on an assessment of the structure and process of setting up and implementing the road funds as well as of an assessment of the objective achievements to date. The paper should be viewed as a work-in-progress, and the analysis would be updated periodically as the conditions and macroeconomic environment changes.

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Date of Publication (Year): 
Nov 2000
Ajay Kumar