Rapid urbanization and population growth in cities of developing countries create a huge demand for various types of urban infrastructure, while they also produce pressure on the existing infrastructure and cause its deterioration. In developing countries like Ethiopia, the federal governments are financially constrained because of various reasons like: rapid urbanization, inadequacy of foreign exchange and a huge demand for basic infrastructure like roads. The growth of Ethiopian cities presents enormous challenges to the nation. Although Ethiopia is one of the least urbanized countries in Africa, the CSA Report (2008) says that due to rapid population growth, 12 million out of 77 million people live in cities. In fact, the provision of adequate road infrastructure services is essential for the socioeconomic development of any country. Dire Dawa, the second largest city in the country, is currently facing similar problems of road infrastructure gaps. In an effort to solve these problems, the city administration has been undertaking road construction using cobblestones. Cobblestone road projects are one of the indigenous (based on locally available materials) road construction technologies implemented as an option to other types of road construction technologies in the city. The objective of the paper is to carry out an assessment on the challenges and opportunities of cobblestone road construction projects in Dire Dawa. The findings revealed that cobblestone road construction projects have brought significant socioeconomic benefits and challenges to the city. To achieve the expected socioeconomic benefits, the city administration and other agencies should work together to face the challenges.

Urbanization is imperative and appreciating the problem of urbanization is inescapable. With rapidly growing urban population, there is an unprecedented increase in the size of cities. Providing for the infrastructure needs of these cities is one of the biggest challenges facing countries today, the problem being particularly acute in developing countries.

As urban population is growing faster than the economic absorptive capacity and fiscal means of cities in most developing countries, governments at the federal level are financially constrained. UN-Habitat (2008a) report on "State of the World Cities 2008/2009", reveals that the rapid urban growth in the developing world is often associated with the ill effects of urbanization: traffic congestion, poor air quality, crime, overcrowding, and slums. High growth rates put pressure on city administrations to deliver infrastructure (road is the essential and prominent among them).

The resources to confront the escalating problems of urban infrastructure provision are increasingly scarce. In Ethiopia and most of the developing countries, urban development is uncontrolled. According to UN-Habitat (2009) Guide to Municipal Finance, the development planning and control mechanism in the cities are either absent or so ad-hoc, that the unplanned urban extensions are being added to each city without any infrastructure. Service infrastructure tries to keep pace with the development resulting in a vicious circle, which leads to perpetual scarcity and shortage. The World Bank (2004) report says that the construction and maintenance of roads and other forms of transport system determine the economic success of cities and countries. Therefore, Ethiopia can also pave the way for economic success by adequate provision of urban roads and related infrastructure in its rapidly growing cities.

UN-Habitat (2008b) in Ethiopia Urban Profile, stated that the development and provision of social and economic infrastructure in Ethiopia is inadequate and the roads, solid waste collection and water supply are often absent. Many urban centers are thus not able to provide basic services to its inhabitants, hampering their socioeconomic development to escape poverty.

Infrastructure Journal, Indigenous Technologies, Urban Infrastructure Provision, Cobblestone Roads in Dire Dawa, Socioeconomic Development, Road Infrastructure Services, Urban Development, Cobblestone Road Technology, Chinese Companies, Petroleum Products, Cobblestone Road Development, Financial Management, Strategic Management.