The study aimed to compare the level of investment in transport infrastructure by mode, in a selection of Low-Income Countries (LICs) and Medium-Income Countries (MICs), with the level of investment in transport related research and development (R&D) in these countries. Investment in the transport sector is quite complex as investment comes from both public and private sources and from official development assistance (ODA) in many MICs and LICs. A review of international statistics provided total spending by mode for a number of MICs. Data for LICs was generally available for total spending in the transport sector but not by mode, although some data were obtained for expenditure on roads.
Transport spending as a percentage of GDP is a frequently used indicator for the level of investment. Generally, in MICs transport investment ranged from 1.5% GDP (Russia) to 2.5% (average for MICs in Sub-Saharan Africa). In LICs the average % GDP tended to be a little higher at ~2.8% GDP. The breakdown of transport spending by nature suggests a greater proportion of spending in MICs is for operations and maintenance activities than in LICs reflecting the more mature nature of their transport infrastructure, although it must be noted that there is considerable variation between different countries.
Investment in the transport sector in both MICs and LICs tends to be dominated by investment in the road sector. Although there are some notable exceptions; for example, both Russia and India (MICs) are making comparable levels of investment in their road and rail sectors. Investment in inland waterways, ports and airports was low in all countries considered. Similarly, from the information reviewed in this study, it appears that the majority of transport investment in LICs is directed towards the road sector. However, it is interesting to see that two of the LICs considered in greater detail in this study, Kenya and Uganda, include upgrading, construction and rehabilitation of their railways in their future plans.
The level of investment in transport related R&D proved more difficult to quantify as statistics on R&D do not separately report work relating to the transport sector. A frequently used indicator is Gross Domestic Expenditure on R&D (GERD) as a percentage of GDP. This indicator is 0.3% for Sub-Saharan Africa compared to 2.7% for North America and 1.8% for Europe. It has been estimated by the World Bank that R&D expenditure related to roads research in Europe is just 1% of the total spend on road transport.
GERD data compiled in this study for a number of LICs gave an average of 0.22% GDP. Hence, the overall level of investment in R&D in LICs is just 16% of that in Europe. Assuming the level of R&D in all sectors is reduced to the same extent, it can be estimated that road transport related R&D is likely to be just 0.16% of road transport expenditure in LICs. As investment on roads appears to dominate transport investment, this figure is also likely to reflect the level of R&D transport overall. This estimation is based on some major assumptions but does fit with the general observations made by the World Bank and others that the majority of ODA and nationally funded work in the transport sector relates to the construction and rehabilitation of the transport infrastructure networks. The World Bank and DFID, both however do recognise the benefits of transport related R&D. The World Bank is currently funding the establishment of a Road Research Centre in Ethiopia and DFID, through their AFCAP transport research programme, is funding feasibility studies for three further road research centres in Kenya, Mozambique and Tanzania. The latter is also considering the potential benefits that could be obtained by regional cooperation.
Statistics for the Agricultural and Health sectors were also reviewed to facilitate a comparison with the transport sector. The average annual investment in agriculture in LIC and MICs from all sources (public, private and ODA) totalled USD 213 billion, whilst the comparable public spending on agricultural R&D totalled USD 4.7 billion, around 2.2% of the annual investment. This figure is substantially higher than the figure of 0.16% estimated for the transport sector. In the Health sector, the Commission on Health Research for Development recommended in 1990 that all countries should invest at least 2% of their national health expenditure in health research and research capacity. The African Health Observatory estimated that USD 517.5 million was spent on health research in 37 African countries in 2005 which represented 1.3% of the combined total health expenditure for these countries. Again this figure is nearly to be an order of magnitude greater than the figure estimated for road research spending in LICs.
Berry, J.; Maks Davis, M.; Schoen, P. Transport investment and research statistics. Evidence on Demand, UK (2013) 40 pp. [DOI: 10.12774/eod_hd025.jan2013.berry_et_al]