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This papera product of thc Transport Division, Infrastructure and Urban Dcvelopment Department - - is part of a larger effort in PRE to study and demonstrate mcthods for designing transport user charges and efficicnt transport prices. This research was funded by thb World Bank's Research Support Budget, RPO 674-37, "Transport Taxation and Road User Charges in Sub-Saharan Africa." Copies arc available free from the World Bank, 1818 H Strcet NW, Washington, DC 20433. Please contact Jennifer Francis, room S 10-063, extension 35205 (44 pages). September 1991.

Gronau studied how much road damage contributes to road use costs in Ghana and how the marginal social costs should be recovered. This required understanding the road deterioration process better and analyzing the implications for vehicle operating costs and road user charges.

The most important thing Gronau learned is that studies of road-user costs are feasible in reputedly data-poor countries. In Ghana, the problem was not so much missing data as conflicting sources of data. Many of these data sources did not exist a few years ago and have been established as part of the transport rehabilitation program. The data sources need consolidating, but the experience in Ghana proves the feasibility of information gathering and its importance as part of any major transport program. An important component missing in Ghana is data on the axle-loading of heavy vehicles - as different types of axle-load inflict significantly different degrces of damage.

Gronau found that to bridgc the gap between road-user costs (including the cost of road maintenance) and charges, the annual fee for hcavy trucks should be raised tcnfold - to about $800 per vchicle. Fuel taxes alone are not adequate to distinguish fully the large difference in road damage costs incurred by hicavy trucks and private cars. The taxing instrumcnt most deficient in Ghana is the armual licensing fee. Not only shoul(u licensing fees for heavy trucks be ten times higher than they are now, but exemptions from the licensing fee should be canccled and registration rules strictly enforced.

Even then, charges on heavy vehicles will not cover costs unless current legal limits of axle loading are obeyed. A more cfficient means of reducing the damaging effects of heavy vehicles lies in structuring the annual fees to reflect how much morc damaging two-axle heavy vehicles are than inultiaxlc vehicles.

If raising the licensing fee for heavy trucks is not feasible, certainly the govcrnment should cancel heavy trucks' exemption from import duties. An import tax of 15 percent and a 10 percent purchase tax (the standard rate on consumption imports) will go a long way toward recovering the marginal cost of road usc - and will be much harder to evade than the license fee.

Gronau found the issue of redistribution of costs and fees of secondary importance in Ghana, because of the counltry's low fuel consumption, the current low level of fucl taxes, and the fact that expenditures on fuels arc proportionately the same for the poor and the nonpoor.

iTnc PRE Working Paper Scries disseminates thc findings of work under way in the Bank's Policy, Rcsearch, and External AffairsComplex. Anobjective ofthe series is to _get_ thesc findings out quickly. even if prcsentations arcless than fuily polishcd. **The** findings, interpretations, and coaclusions in these papers do not necessarily reprcsent official Bank policy.

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