Investment in infrastructure will spur economic growth

President Paul Kagame is today expected to host the third regional infrastructure summit in Kigali. It is a follow up to the Entebbe and Mombasa summits where Kenya, Uganda and Rwanda agreed to fast track some regional infrastructure projects.Improving regional transport network will lessen high transport costs in doing business. A poor road network and unreliable transport and power supply affects revenue collection. Rwanda and Uganda are landlocked countries, and therefore failure to invest in regional infrastructure means they will continue incurring high costs in transportation of goods. Lack of a functional railway transport system in the region or Africa as a whole has translated into high transport costs compared to other regions of the world.The cost of land transport is said to stand at about 50 per cent of the sales price of goods in landlocked countries. Our road, railway and port infrastructure should serve the people of this region effectively.Drawing lessons from more developed countries, it is clear that investment in regional infrastructure like roads, railways and energy will increase the volume of intra and inter regional trade, and spur economic growth. Intra regional trade stands at a mere 9 per cent of total trade in Africa, against 50 per cent in emerging markets in Asia. This trend can be reversed with more investment in infrastructure.According to economists, investment in infrastructure accelerated the annual growth convergence rate by over 13 per cent in Africa over the last 30 years. In this light, investment in regional infrastructure projects will certainly ease movement of people and facilitate trade across national boundaries. It will also increase our global exports which at the moment are far behind our potential. That aside, it will also facilitate delivery of quality public services which are normally responsive to business needs.As we push for implementation of decisions, we should consider inviting the private sector to contribute to these efforts by fully taking advantage of the investment opportunities that come with a bolder step towards integration.

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Investment in infrastructure will spur economic growth