Ghana Priorities: Rural Transportation

EminentPanelConference,Accra,August7th -9th,2020
PRELIMINARY FINDINGS:
Rural Transport in Ghana
Michael Graham, Head of Development Finance Programmes at the
University of Stellenbosch Business School, Cape Town

Infrastructure and Economic Growth
The current state of road infrastructure
 Total network of 78,402 km with only 49% either maintained or rehabilitated.
Poverty levels and state of road infrastructure
0
10
20
30
40
50
60
70
80
90
100
Upper East Upper West Northern Brong Ahafo Ashanti Volta Eastern Greater Accra Central Western
Percentage
Region
% Living below Poverty Line (1999) % of roads in poor condition

Infrastructure and Economic Growth contd.
The current state of rail tracks
 Total track network length is 1300km, with the rail industry operating a route length of 947km.
 60% of the rail network is not used on a regular basis due to infrastructure decay.
 Limits the country’s potential in harnessing its resources.
 International competitiveness and market access
 Stimulate industrial and labour productivity growth rates,

Intervention 1
Development of Rural Roads

Rural Roads: Overview
Construction of 1888km of roads
 Link several identified high agricultural production areas to the nearest commercial centers
 Link several tourism areas to the nearest commercial centers

The expected net present values of the cost of the project is
GHS5.3 billion at 8 percent discount rate.
Costs across the project life
0
200
400
600
800
1000
1200
1400
1600
1800
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
Costs
(GHS,
million)
Year
Contruction Cost (with overrun) (GHS, millions) Routine O&M Cost (GHS, millions) Periodic O&M Cost (GHS, millions)

The expected total net present value of the benefit for the road
intervention is estimated to be GHS6.5 billion at 8% discount rate.
Benefits(GHS,Millions) Costs(GHS,Millions) BCR
WithoutCostOverruns
5% 10,237 6,220 1.65
8% 6,494 4,650 1.40
14% 3,092 2,990 1.03
WithCostOverruns
5% 10,237 6,973 1.47
8% 6,494 5,297 1.23
14% 3,092 3,481 0.89
0 1E+10 2E+10
Carbon emission savings
Generalised cost savings
Travel cost savings
PHL savings
Road Benefits

Intervention 2
Rehabilitation and expansion of Railway tracks in Ghana

Rail: Overview
 The rail intervention project
 Rehabilitation of 668 km of existing narrow gauge tacks by converting them into single-tracks
standard gauge
 The expansion of rail networks to the northern region of Ghana by constructing new standard
gauge tracks with a total length of 3340km.

Cost
The expected total net present value of the cost for the rail intervention is
estimated to be GHS 72.9 million per kilometer

Benefits
 The estimated NPV of benefits is GHS109 million/km,
comprising;
 Time savings
 Pax GHS/km 575
 Freight GHS/km 19,500
 Avoided VOC
 Pax GHS/km 38,000
 Freight GHS/km 3.9 million
 Accident Savings
 1,394 lives saved amounting to GHS/km 118,000
 PHL savings
 Estimated savings of PHL at base year GHS/km 20160
 Residual Value
 Pax GHS 5 million
 Freight 4 million
Times savings for passengers and freight

Total Benefits and Cost-Benefit Ratio
Discount rate Benefits per km
(GHS, Millions)
Costs per km
(GHS, Millions) BCR
5% 175 76 2.3
8% 109 72 1.5
14% 52 69 0.8
Summary of Benefits and Costs for Rail Intervention

SUMMARY BCR TABLE
INTERVENTION
BENEFITS
(GHS M)
COSTS
(GHS M)
BCR
Development of Rural
Roads 6.5 billion 5.3 billion 1.2
Rehabilitation and
expansion of Railway
tracks in Ghana
109 72 1.5

Ghana Priorities: Rural Transportation

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