they find that terrain ruggedness and population density increase unit costs, whereas long roads ( _>_ 50km) decrease it. Furthermore, conflict, corruption, the business environment, and the origin of construction firms affects unit costs. ROCKS version 2.3 used by Collier et al. (2016) runs up to 2008. In 2018, the World Bank’s transport unit released an update including only projects with complete information (Bosio et al., 2018). Unfortunately, most projects in this database are road upgrades, but a few new road projects are included as well and summarized in Table 5.

Table 5: Road Building Costs: Road Costs Knowledge System (ROCKS) - 2018 Update

|Work Type|N|Length|(km)|Cost (M$’15)|Cost/km|
|---|---|---|---|---|---|
|_Continental Africa_||||||
|New 1L Road|1||99.0|21.15|0.214|
|New 2L Highway|4||122.0|59.53|0.611|
|_All Low and Lower-M_|_iddle _|_Income _|_Countr_|_ies_||
|New 1L Road|6||59.5|7.65|0.135|
|New 2L Highway|6||84.5|44.09|0.611|
|New 4L Expressway|1||84.8|328.08|3.869|
|_All Countries_||||||
|New 2L Highway|7||50.0|43.03|0.682|
|New 4L Expressway|24||74.9|213.01|5.152|

_Notes:_ Statistics are aggregated across projects using the median. Costs are in millions of 2015 USD. The raw costs in current USD were deflated at their project end date using the US GDP deflator with base year 2015.

According to the final column of Table 5, which provides median costs per km in millions of constant 2015 USD, the median new African road in the 2-lane highway category (implying one lane in each direction) costs $ 611K/km. This estimate, though derived from only four projects, is consistent with other estimates: a 2014 report by the African Development Bank (African Development Bank, 2014) analyzes 172 Projects contracted between 2000 and 2008 and reports a median cost of 227,800 2006 USD per lane-km. This figure includes road upgrades. Multiplying by 2 for a 2-lane highway and inflating by 16% to 2015 USD yields 528,800 USD per lane-km.

Following Collier et al. (2016), I allow for heterogeneity in road construction costs. Since it is difficult to measure (ever-changing) political conditions across the continent, I follow Fajgelbaum & Schaal (2020) and Graff (2024) and only consider average returns to ruggedness and distance, as well as population. My preferred specification is The first part is taken from Eq. (21) of Fajgelbaum & Schaal (2020). The 120,000 USD/km constant makes the mean cost/km across all existing links approximately equal to $ 611K/km. The population coefficient is averaged across Tables 4 and 5 of Collier et al. (2016), following Fajgelbaum & Schaal (2020), which obtain the other coefficient in this way. The tables suggest that Collier et al. (2016) regressed the log of cost on the population density (in 100 people/ _km_<sup>2</sup> ), but applying the coefficient to the levels density yields peak construction costs above $ 10M/km near large cities, which I regard as unrealistic. Thus, I use the natural log of the population density and add 1 to avoid negative values in remote regions. This effectively reduces the relevance of this term and remains close to Fajgelbaum & Schaal (2020). I extract ruggedness from the original 30 arc-second layer by Nunn & Puga (2012) within a 3km buffer around existing and proposed links, and do the same for population from the WorldPop 2020 population layer at 1km resolution.<sup>22</sup> Figure 17 shows ruggedness and population density thus estimated for each link.

> 22It is possible to track the terrain around existing roads more closely, but being more realistic with existing links complicates comparison with potential new links. Thus, I opt for a simpler approach of considering terrain within a broad 3km buffer in the direction of travel for both existing and potential new links.

21