Ghana’s rural areas contribute significantly to economic output. According to the Ghana Statistical Service, the agriculture, and mining and quarrying sectors – typically located in rural areas – contributed a combined GHS117.7bn ($20.1bn) to GDP in 2020, or 32.7% of the total. However, poor connectivity prevents many rural businesses from reaching their full potential. While developing the road network is integral to facilitating economic growth in rural and other underserved areas of the country, expansion of the rail network will also be key to connecting rural communities with broader economic activity in an effective and dependable manner.
Ghana contains 265 districts, each of which has a capital intended to serve as the main commercial centre for outlying towns and villages. Agriculture accounts for nearly half of the labour force, with 7.3m people owning or operating farms. Many live several hours from their district capitals – a distance exacerbated by the condition of roads and the high cost of travelling to get produce to market.
Feeder roads account for approximately 62% of Ghana’s road network and serve as the primary transport linkages between rural communities and centres of commerce. A 2020 report from the Copenhagen Consensus Centre (CCC) found that 65% of rural-urban roads were in sub-optimal condition and 76% of Ghana’s total road network was unpaved. These findings offer insight into the scale of investment required for the country’s roads to facilitate broad and inclusive economic expansion.
Beneficiaries of the Planting for Food and Jobs initiative, through which the government aims to raise agricultural production by subsidising inputs for small-scale farmers, reported in 2019 that while the programme had successfully enabled higher crop yields, the poor condition or lack of roads had prevented them from getting sufficient volumes of produce to commercial centres. Indeed, the CCC found a strong correlation between the conditions of roads and the incidence of poverty. The study examined the viability and potential economic effects of Ghana’s road and rail master plans, and highlighted the positive effects that rural road development and maintenance had on the economies of both China and India at similar stages of development.
According to the findings of the report, the comprehensive broadening of rural-urban road linkages in China provided a boost to GDP four times higher than that offered by the development of high-grade roads. Similarly, in India, the development of paved rural-urban roads enabled greater integration of economic activities, as well as more widespread implementation of agricultural technologies.
Similarly, an analysis released in September 2020 studying a road development project implemented by the Millennium Challenge Corporation (MCC), a US foreign assistance agency, found that the organisation’s development of 357 km of feeder roads in Ghana, valued at $71m, improved the asset holdings of businesses that were serviced by those roads by 44% between 2014 and 2017, compared to businesses that were not situated along the developed routes. While this demonstrates the positive effects of feeder road development, the MCC noted that the Department of Feeder Roads (DFR) lacked the resources to maintain the roads, and, as a consequence, 43% were in either poor or very poor condition at the time of the report’s publication.
Routine maintenance is key to ensuring reliable road connectivity. The authorities carried out a series of maintenance works on some 11,061 km of Ghana’s feeder roads in 2020, and this undertaking has continued into 2021. In June of that year the government announced that the Ministry of Food and Agriculture, the Ghana Highway Authority and the DFR would embark on a GHS13.6bn ($3.2bn) rural road development programme spanning 4465 km aimed at providing better market access and connectivity for rural and agricultural communities. The long-term economic impact of such efforts is sizeable. The CCC report examined the potential benefits of a proposed 1888-km rural road project. Based on the benefits delivered by similar interventions in Ghana and a host of other variables, the organisation concluded that the project could yield up to GHS21.2trn ($3.6trn) worth of economic benefits over a 30-year period, with 2018 as the base year.
Ghana has a high incidence of floods and storms, with its rural areas most affected in large part due to connectivity issues. To address this, in November 2020 UK-based bridge construction and engineering firm Mabey Bridge won a contract to build 89 bridges in strategic locations across the country at a cost of £43m. The programme is intended to improve connectivity for rural communities, and aid disaster response and recovery efforts. The climate-resilient, modular bridges will be installed by late 2022 or early 2023, with Mabey Bridge providing overall project management support and training for local engineers.
Ghana’s national economic development plans also feature major expansion of the country’s railway network. The details of those plans’ constituent projects are aligned with Ghana’s broader intention to link its rural regions with major cities and ports, as well as neighbouring countries. As of 2021 Ghana’s rail activity accounted for around 3% and 4% of all freight and passenger traffic in the country, respectively, and operated on a triangular network between Accra, Kumasi and Takoradi.
In June 2020 the government announced that it had signed a €500m contract with Amandi Holdings for the construction and regeneration of the 102-km Takoradi-Huni Valley section of the Western Rail Line, which runs between Takoradi Port and the city of Kumasi. Huni Valley is a key contributor to the country’s mining and agricultural output, and is rich in gold and cocoa – top of Ghana’s top exports.
South African logistics firm Transnet is working to develop another portion of the line between Takoradi and Tarkwa, the latter of which is home to a mine that produced 5m tonnes of manganese in 2019. All but 560,000 tonnes of that figure was transported by road. The construction of the additional section of railway is expected to bring down transport times and costs, while also easing road congestion and damage en route. These developments represent significant steps in enabling better movement of people and goods between rural and urban areas, and are expected to facilitate economic growth for the rural businesses and locations that they serve.
The January 2021 launch of the African Continental Free Trade Area (AfCFTA) is expected to facilitate increased levels of trade across the continent. Ghana’s political stability, favourable business environment and strong macroeconomic policies could prove attractive to international corporations that establish or deepen operations in Africa to capitalise on the AfCFTA. This would boost Ghana’s tax revenue via trade and export growth, generating additional public funds for road and other transport infrastructure initiatives.
Another key component of the government’s rail development programme is the Central Spine Line, which was in the feasibility stage as of late 2021. The line is intended to run from the centre of Kumasi to Paga on the northern border with Burkina Faso and beyond. It will connect cities, towns and villages along its route, and will also link with the existing Eastern and Western lines. This is expected to open trade and employment opportunities for rural inhabitants. By providing rail connectivity to the agriculturally focused northern regions, the development is expected facilitate economic growth.
Similarly, the authorities hope that the TransECOWAS rail project, which will stretch east to west from Aflao, on the border with Togo, to Elubo on the border with Côte d’Ivoire, will bring considerable economic value to Ghana. It is also hoped that the project will as strengthen bilateral trade and relations, as ECOWAS member nations harness the growth potential offered by the AfCFTA. The development is expected to cost around $3.8bn, and work is set to commence in 2022, with completion slated for 2025.
The country stands to benefit from the completion of these infrastructure and connectivity projects. Linking agricultural areas and rural tourist attractions with district capitals and major cities is expected to drive economic development. Indeed, the CCC report found that Ghana’s rail interventions could generate GHS6.5bn ($1.1bn) per km between 2019 and 2049. The potential costs associated with these developments could total GHS5.3bn ($905.8m) per km, leaving a yield of GHS1.2bn ($205.1m) per km. This demonstrates not only the viability of investing in rail projects in Ghana, but also their sizeable benefits for local rural communities and businesses.