Fuel taxes and road-user charges in LDCs: some lessons from sub- Saharan Africa

The paper is an offshoot of two studies conducted recently on road user charges and transport taxes in sub-Saharan Africa (SSA). It seems that many of the lessons learned apply to most other LDCs. Foremost among these lessons is the secondary importance of urban congestion in many countries compared with the problem of road deterioration. Consequently, the prime interest of the policy-maker should be heavy vehicles rather than private cars. Fuel taxes on diesel, annual licence fees and acquisition taxes should aim at reducing heavy traffic discouraging overloading. The paper opens with a theoretical section, summarising the theory on road user charges, and describing some second-best solutions to be applied when the optimum is unattainable. This section is followed by a description of our main findings for Ghana and Zimbabwe. In the subsequent section we describe the lessons to be drawn from the SSA experience with fuel taxation and cost coverage. -from Author