CROP PRODUCTION AND ROAD CONNECTIVITY IN SUB-SAHARAN AFRICA

# Implications of investment: corridors versus rural roads in Mozambique

The above approach can be used to estimate the effects of alternative road infrastructure investments on agricultural production in Mozambique, a country with one of the most detailed road infrastructure spatial data sets in Sub-Saharan Africa. Rather than using the estimated parameters from East Africa or all of Sub-Saharan Africa, we conduct a separate regression analysis for Mozambique and then use the parameters to estimate the impact on agricultural productivity due to changes in travel time brought about by alternative road investments.<sup>22</sup> The regression results indicate considerably greater sensitivity of production to differences in travel times in Mozambique than in East Africa overall. For example, the elasticity of total crop production with respect to travel time to cities with 100,000 people or more in East Africa overall is - 1.7 (and -0.8 for maize). For Mozambique, the elasiticity of total crop production with respect to travel time to cities of 50,000 or more is -2.8 for all crops (-1.6 for maize) (see tables 5.2 and 5.3).<sup>23</sup> We use these parameters to analyze two different scenarios: (a) an investment in the five major international corridor roads in northern Mozambique and (b) in addition to the investment in corridors, the upgrading of all existing rural and feeder road networks to gravel, good-condition surfaces, raising speed attainable on these roads to 60 km/hr.

Using the estimated regression coefficients and the simulated changes in travel times to cities of 50,000 people or more per pixel, improvements in the national corridor raise total crop production by 24 percent and maize production by 33 percent (table 5.4). The investments in rural feeder roads in scenario 2 raise national crop production by a further 131 percent and maize production by a further 146 percent. These simulated production gains are extremely high, reflecting (a) the huge potential for increased production (as reflected in the difference between actual and potential production); (b) the reduced-form estimation procedure used, which provides measures of the elasticity of crop-supply locations (including reallocation of crop production across locations); and (c) the underlying assumption of completely priceelastic demand (that is, that expansions in crop production and sales do not lead to a fall in crop prices). This latter assumption is particularly unrealistic for domestic staple food crops, although a high elasticity may be appropriate for some exported agricultural products. Nonetheless, this analysis, done for more microscale investments where increases in production would not greatly affect the total market supply, could suggest the potential gains of alternative road investments on agricultural productivity and farm incomes.

> 22 Note that because large-scale flooding severely damaged crops in Mozambique, the IFPRI SPAM used regional production figures from 2006 instead of 2000 as an input into the calculation of spatial crop allocations.

> 23 We use a smaller city-size cutoff (50,000 as opposed to 100,000) for Mozambique to reflect cities in which major wholesale markets are located. Consistent data on cities of 50,000 to 100,000 are not available for all of SubSaharan Africa.

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