Friday, March 10, 2017

Road infrastructure in the DRC- Interesting data from the World Bank

Road infrastructure in the DRC- Interesting data from the World Bank

I came across a World Bank (WB) report on the DRC named « Exogenous Shock, Macroeconomic Stability and Development: Economic Policy Options » published in December 2016.

I have discovered very interesting facts on the country road infrastructure. The WB reports that the level of coverage of the road network places the DRC well below the African average, with its Road Network of General Interest (RRIG) representing a spatial density of roads of 25 km/1000 km2 against an African average of 204 km/1000 Km2. Coverage in relation to the population is 0.9 km/ 1000 inhabitants compared to an African average of 3.4 km/1000 inhabitants. It is worth noting that only 26% of this RRIG can be used today!!!

The lack of quality and quantity of road infrastructure obstructs the development of economic activities and hinders the development of the private sector. Indeed, road infrastructure provides physical access to resources and markets and facilitates trade between the country provinces. In 2013, 24.8% of firms reported transportation problems as a major constraint to their operations according to the report. This is due to the fact that the majority of the territory remains inaccessible by roads, which makes the displacements of people and goods very expensive.

The WB continues by saying that poor infrastructure in the DRC leads to productivity losses of up to 40% and that by making the right investments, business costs could be reduced by 80% and the costs of transporting agricultural products could be reduced by 70%!!!

The maintenance is another issue. Indeed, the maintenance deficit accelerates the deterioration of existing roads and prevents the benefits of network expansion in circulation. The reports says that in 2012 for example, the Office des Routes (government agency in charge of road maintenance) was supposed to maintain 13,000 km of roads but only maintained 7,600 km, representing 58% of the total.

Although the report recognizes an important increase in road infrastructure expenditures and an improvement in the sector governance it is also saying that the government has invested an average of 1.8% of GDP over 2008-2012 in its urban and inter-urban networks, which is 1.2 percentage points lower than necessary to ensure adequate maintenance and progressive development of the road network.

Last but not least, the DRC is almost always the most expensive country in Sub-Saharan Africa (SSA) when it comes to cost of materials and work on road infrastructure as shown in the table below.

Table 1: DRC ranking on cost of materials and work on road infrastructure compared to SSA countries

Asphalt
Crushed Stones
Gravel
Simple work on dirt road
Surface treatment
Double surface treatment
DRC ranking
2
2
1
5
2
1
Number of countries
11
8
10
12
6
7
Variance to the mean
+44,1%
+44,4%
+109,6%
+7,3%
+22,1%
+33,2%

Obviously, the full report provides more details on the country road infrastructure but the few statistics presented above were an eye opening for me on this crucial area of our economy. Not only we are far behind our SSA peers in terms of road network development but we are also one of the most expensive countries when it comes to acquisition of materials and to the work on roads itself. Needless to say that with our limited State Budget (not yet voted for 2017 by the way) this is not good news…

Discussion sur le secteur bancaire avec Bob Nzoimbengene, Partner chez Deloitte.

Une fois n’est pas coutume, l’analyse du secteur bancaire sera faite cette fois-ci par un ancien banquier. J’ai le plaisir d’accueillir mon ...