Recently, I set out to study the economic analysis of China’s transport system. Many writers I read considered the impact of transportation infrastructure on China’s economy with shared criticisms. One of the major criticisms I found taxed against China’s transport system was that although it comprises a wide network of roads, railways, and airports across its huge territory, the transport network, especially of roads tends to concentrate on the more economically developed coastal areas and inland cities along major rivers. As soon as I read this critique of China’s transport system, I understood that it was actually the explainer for China’s economic triumph. In building roads and railways in major business centers, China leveraged its strength to further expand its economic output. In Uganda, the government’s policy on road construction is focused on ensuring Uganda is connected “border to border” which is not a bad thing had it not been at the expense of constructing greater Kampala roads to leverage our significant economic dividends in the region.
I suspect that the construction of roads in Uganda is more (this is not to say it is the only reason) a political rather than an economic project. I also suspect that the president has much to say in the decision-making process of awarding contracts for major road constructions. The president decides to have a road constructed in an area because the local population there demanded for one… because their children “want to see tarmac also!” As such, we have roads built in areas where the net return on investment is simply political capital for the president/ the ruling government at the expense of Uganda’s economic development.
I suggest that road construction should be looked at foremost as an economic enterprise with measurable returns on investment. For every road constructed, we must be able to measure the efficiency and profitability it will produce in return. Uganda can calculate its return on investment from its road construction by assessing the economic benefits generated from road investments compared to the costs. For instance, we must be able to calculate the initial construction costs including materials, labor, and land acquisition; maintenance and operational costs over time; and environmental and social costs e.g., displacement of people and wildlife, and pollution. We also must be able to calculate the benefits estimated from the investment. For instance, increased business activities due to better transport; lower vehicle maintenance and fuel costs; shorter travel times for goods and people; reduction in road accidents and fatalities; more efficient movement of goods and services and increased land and property values near improved roads. To know the net benefit from the road constructed, we would have to subtract the total cost of construction from the total benefits estimated from the investment. Does Uganda bother with these calculations while undertaking road construction projects? I think not.
Without assessing whether our road investments are yielding positive economic and social returns, the huge amounts of money sunk into road construction are simply buried, not planted investments.
China’s transportation infrastructure investments are carefully calculated to ensure they contribute significantly to China’s GDP. For every highway built, China targets to improve logistics and reduce costs. For every railway built, China has done a study and established the need to enhance efficiency and increase overall productivity from a certain economic zone. For instance, China’s high-speed rail system is intentionally built to connect economic hubs with realisable productivity to facilitate business expansion by reducing travel time and increasing market accessibility. If we had these calculations in Uganda, the districts of Kampala, Wakiso and Mukono would take at least 50 percent of the road construction budget of Uganda.
Why?
Kampala, Wakiso and Mukono districts produce 65% of Uganda’s total Gross Domestic Product and 75% of the country’s total tax revenue collection. The bewildering irony is that despite such an enormous contribution to our nation’s economic output, these enterprising districts receive less than 2 percent of the budget allocated to road construction and maintenance for the rest of the country. This is a policy miscalculation I can never comprehend!
There is not an ounce of understanding of economic prioritization in how Uganda makes investment decisions on road construction. China concentrates its road construction in economically developed coastal areas and inland cities along major rivers such as the Pearl River Delta, Yangtze River Delta, and Bohai Economic Rim because they are the country’s economic powerhouses. These are areas that contribute significantly to China’s GDP through manufacturing, trade, and services. It is obvious that developing transport infrastructure in these regions maximizes economic returns even if many other parts of the country may lack comprehensive transport infrastructure. Why don’t we make this prioritization too? Why is it too hard to see?
China’s coastal cities also host major ports like Shanghai, Shenzhen, and Guangzhou, which handle a significant portion of China’s international trade. These regions also have high population densities. So, it makes sense to ensure efficient road networks in these areas to smoothen the transportation of goods and people between ports and industrial hubs. Following the same logic, Uganda should have a detailed road and railway network to ensure efficient transportation of goods from Malaba, through Jinja, Mukono to Kampala. Why do we have one, narrow, dilapidated road carrying the entire volume of goods into the country from Malaba?
It cannot be that the country’s understandable budget constraints are the cause of Uganda’s poor transport system in urban areas. Not even China has enough money to build every road in their country. It all comes down to prioritization of investment and strictly investing in roads with realisable economic output. Uganda’s road network spans 160,000 km. 21,000 km of that are national trunk roads, 38,600 km are district roads, 20,000 km are urban roads (covering cities, municipalities, and towns), and 80,000 km are community access roads. The country’s revenues simply can’t sustain constructing all these roads. But basic economic considerations would long have made it clear to us that we must concentrate on the 20,000 km of urban roads to create efficiency in these economic hubs which would in return generate the revenues to expand road construction to other areas across the country.
The mathematics seems simple. The return on investment looks great. Why can’t our government make policy shifts and do what is necessary?
The writer is a senior research fellow at the Development Watch Center.