Abstract:
This study analyzes the impact of government road spending on economic growth in Ethiopia
using annual time series data for the period 1974-2010. T\o do so, both descriptive and
econometric analyses are employed in the study. From the descriptive analysis the findings
indicate that the trend of government road sector spending has increasing for the past few years.
Regarding the performance of road sector, the road network is by now growing at an
encouraging rate. The issue of rural accessibility still remains far from the desired level that the
country needs to have. Thus, the country needs to do a lot to graduate to middle income country
status in terms of road network expansion and improved accessibility. The Econometric
analysis, With the help of cointegration and vector error correction analysis, the impact of
government road spending on economic growth was assessed in the long-run as well as in the
short-run. The findings reveal that government spending on road has a significant and positive
effect on the economic growth (GDP) in the short-run as well as in the long-run. By way of
recommendation, the government need to strengthen its support on road infrastructure through
allocate more road financing to expand the road network with the aim of increasing the current
rural accessibility, thus, improving agricultural productivity and market access of the poor rural
population with the aim of boost the current economic growth.
