Economic Cost, Benefit and Value for Money Analysis of AFCAP Research Outputs. Final Report

Abstract

This report addresses four questions related to the Low Volume Sealed Road (LVSR) approach to sealing unpaved roads. It uses an adapted and expanded version of the suite of programs used by the World Bank in its evaluation of rural roads. The results indicate that the economic benefits of: adopting a LVSR approach compared with a conventional design approach for paved roads has a net present value of about USD $31,000 per km; upgrading poor condition gravel roads to paved road standards using the LVSR approach have a net present value of about USD $50,000 per km; applying LVSR design standards within their road sector development programs for countries participating in the AFCAP program related to the LVSR approach would have a net present value of approximately USD $100mn; and AFCAP investments in supporting the LVSR approach are about USD $60mn, equivalent to a Benefit/Cost ratio of more than 7.4 and a modified economic rate of return of about 21%. The results of the final evaluation are an indication of the substantial economic benefits to be gained from sustaining the AFCAP program on LVSR roads. Much of the AFCAP investment so far has been to lay the groundwork for future benefits. Further investment would not only add to those benefits but also greatly enhance the probability of their being realized