The nexus between road infrastructure and economic growth in Kenya

Abstract

This paper addressed the questions on the impacts of road infrastructure network on the overall economic growth rate in Kenya and if there exists a sectoral bias in the public expenditure between road infrastructure and provision of other social services in Kenya using for 1963 to 2014 period. Ordinary Least Squares method was used to regress a simple linear regression model. The study found that for every one shilling spent on road infrastructure by the government GDP per capita increases by Kshs. 572.753 holding other factors constant. This therefore empathises on the importance of road infrastructure as pointed out in the country’s economic development blue print vision 2030 on physical infrastructure. These findings therefore confirm the current ambitious plan by the government to build more physical economic infrastructure especially road infrastructure by increasing total number of tarmacked roads is founded on the belief that increased road connectivity has a positive multiplier on the overall economic growth. In addition, it is noteworthy that these efforts are not only geared towards construction of international trunk roads but also national, urban and the rural roads in efforts of increasing connectivity. However, the GDP per capita is not very responsive to the private sector investment in the road infrastructure as it is for the public road expenditure. On the sectoral bias expenditure on health and energy are strongly positively correlated. Similarly expenditure on health and energy expenditure are strongly positively correlated with education and agricultural expenditure thus ruling out the possibilities of sectoral bias for such public expenditures.The study therefore recommends for more adoption and sensitization of the PPP programme that has now a legal framework following the enactment of PPP act 2012. In addition, the annuity financing aspect in road infrastructure needs to be fast truck by the government in order to realize the dream of 10,000 km now tarmac roads by the government.