Role of Transport Sector on Economic Growth in Rwanda, Econometric Approach

Abstract

Role of transport sector on economic growth in Rwanda for the period of 1999 up to 2018, is an empirical study which used econometric approach. The result showed a strong statistically significant relationship between GDP and transport sector as measured by transport services for both short run and long run as it is shown by R-squared of 0.997316 and 0.782009 of the long run regression model and error correction model respectively. ECM showed a quick recovery of 81.3% every year after a shock happen. The research concludes that there is a short run and long run relationship between Transport service and economic growth and recommend that policy implication that can be deduced from this study to facilitate transport sector through expansion of road networks and maintenance of existing road networks coupled with revitalization of alternative mode of transportation such as air transport, rail system and waterways significantly improve the growth of the economy Key words: Gross domestic product, gross capital formation, trade balance and transport services.