The Government has received 40 million Euros from the European Union to upgrade about 700km of feeder roads in seven rural districts. During the signing of the financing agreement on Friday, the Minister of Finance and Economic Planning Ambassador Claver Gatete said that the planned rehabilitation of rural feeder roads will improve access to markets by rural farmers and deliver affordable food to urban consumers.
He is right.
There are several reasons why feeder roads can contribute to national development. First of all, the greatest challenges faced by farmers and all who do business in rural areas is limited access to markets because some roads can be impassable, especially in rainy weather. In order for them to produce commercial quantities, farmers need assurance that their produce will reach the market fast and cost-effectively. There is no doubt that poor rural roads hinder a shift from peasant farming to modern agriculture.
Secondly, manufacturers need good feeder roads to facilitate easy transportation of raw materials. This is especially true for agro-processing plants.
Perhaps most important is the stabilising effect cheaper and effective transport has on prices and overall macroeconomic environment. Rising food prices have of late become the main cause of inflationary pressure not only in Rwanda, but in most of sub-Saharan Africa where agriculture is the main contributor to real GDP growth.
While seasonal factors have a major influence on production and hence the price, the cost of transporting food from rural areas where it is produced to markets in urban centres also influences the price at which middlemen will sell to consumers.
If good roads result in lower transport costs, then inflation pressure originating from food supply shortages may be mitigated hence a stable macroeconomic environment.
Therefore, as the minister pointed out, this funding will help make food affordable to consumers in urban areas by reducing the time spent by transporters moving on bad roads from producing areas to towns and the cost of maintaining vehicles.
And all this will have a positive impact on the country’s development agenda, the immediate one being the five-year second Economic Development and Poverty Reduction Strategy (EDPRS II), launched last month.