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Econometric Analysis of Transport Sector on Economic Growth in Rwanda (1999-2018)

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Document pages: 13 pages

Abstract: The purpose of this studywas to examine Econometric analysis of transport sector on economic growth inRwanda for the period of 1999 up to 2018. It’s an empirical study which usedeconometric techniques such as unit root test, Engle granger test cointegrationtest, linear regression model and the error correction model to analyze thecontribution of transport sector on economic growth based on Gross Capitalformation in terms of transport infrastructures, trade balance as import andexport can be affected by transport system, and contribution of transportservices to economic growth. This study found that, there was a strongstatistically significant relationship between GDP and transport sector asmeasured by transport services for both short run and long run as it is shownby R-squared of 0.997316 and 0.782009 of the long run regression model anderror correction model respectively. ECM showed a quick recovery of 81.3 everyyear after a shock happen. This study concluded that there is a short run andlong run relationship between Transport service and economic growth. This studyrecommends that policy implication that can be deducted from this study to facilitate transport sector through expansion of road networks andmaintenance of existing road networks coupled with revitalization ofalternative mode of transportation such as air transport, rail system andwaterways will significantly improve the growth of the economy

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