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Are Ghana's roads paying their way? Assessing road use cost and user charges in Ghana

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Abstract

The author 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 learned is that studies of road-user costs are feasible in reputedly data-poor countries. The author found that to bridge the gap between road-user costs and charges, the annual fee for heavy trucks should be raised tenfold. Fuel taxes alone are not adequate to distinguish fully the large difference in road damage costs incurred by heavy trucks and private cars. The taxing instrument most deficient in Ghana is the annual licensing fee. Not only should licensing fees for heavy trucks be ten times higher than they are now, but exemptions from the licensing fee should be canceled 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 efficient means of reducing the damaging effects of heavy vehicles lies in structuring the annual fees to reflect how much more damaging two-axle heavy vehicles are than multiaxle vehicles. The issue of redistribution of costs and fees is of secondary importance in Ghana because of low fuel consumption, low level of fuel taxes, and the fact that expenditures on fuels are proportionately the same for the poor and the nonpoor.

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