ABSTRACT
Donor-funded projects are crucial for socio-economic development of nations. Unfortunately, infrastructural deficit in Ghana has widened in the face of dwindling oversees development aid. Delivering value-for-money project remains vitally important for key stakeholders. This study seeks to examine critical factors for project success/failure, and specifically the relationship between critical factors and successful implementation of donor-funded projects in Ghana.
The study was conducted through a survey of fifty (50) respondents including Project Practitioners, Contractors, Consultants, Suppliers and Ministry of Education Officials. Correlation analysis and regression analysis were later deployed to analyze the data gathered.
The findings of the study showed that the following five predictor variables/critical factors; project planning, design, monitoring, stakeholder engagement and institutional environment are positively and significantly related to successful implementation of donor-funded projects.
The study actually concentrated on World Bank funded projects implemented by the Ministry of Education. Thus, limiting the generalization of the findings. Besides, there was also limited availability of local empirical literature with respect to critical factors that influence donor- funded projects implementation in Ghana.
The results suggest that public sector organizations that embrace the above five critical factors succeed in the implementation of donor-funded projects. Thus, it is recommended that Development Partners and beneficiary Governments should give a more detailed consideration to the five (5) critical factors in the formulation and implementation of loan/grant agreements to help ensure the success of future development projects.
CHAPTER ONE INTRODUCTION
Background of the Study
Donor-funded projects are crucial for socio-economic development of nations. It is therefore not surprising that the Paris Declaration (2005/2008) placed emphasis on five key principles to make aid more effective: Ownership, alignment, harmonization, managing for results and mutual accountability. The cost of an infrastructure project failure does not only affect the project sponsor or financier alone, but it also affects the entire society since this is an asset highly connected to several social needs, for example, educational infrastructure, water treatment, hospitals, power plants, roads and telecommunication systems, just to mention a few. It is worth noting that International Development Agencies/Organisations undertake development projects in most developing countries and emerging economies but do not directly implement such projects. They tend to supervise project implementation through their Project Supervisors variously referred to as Task Managers or Task Team Leaders. Similarly, donor funds recipients (Governments) tend to implement donor sponsored development projects through their project implementation agencies/units (PIUs). By this, PIUs therefore remain an integral part of project success/failure determination.
Projects have been around since ancient times. Noah building the ark, Leonard da Vinci painting the Mona Lisa, Edward Gibbon writing The Decline and Fall of the Roman Empire, Jonas Salk Developing the Polio Vaccine – all projects. These projects were all masterful successes (Stanley
E. Portny, 2010). Today, projects still remain the instruments of choice for policy makers in the pursuit of international development agenda. Project management has become an important part of any organization in the face of technological advancement, complex and competitive global
marketplace (Ramazani & Jergeas, 2015).
Infrastructure facilitates the delivery of essential services (from health and education for all to access to energy, clean water and sanitation) that enable society to function and economies to thrive. About US$18 trillion was invested worldwide in infrastructure projects. This puts infrastructure at the very heart of efforts to achieve the Sustainable Development Goals (SDGs) by 2030 (McKinsey Global Institute, 2016). Approximately $3.5 trillion in infrastructure investments will be needed every year for all countries in order to achieve the SDGs (unops.org). Infrastructure project therefore remains a high priority for governments, citizens, and donors alike given the crucial role it plays in achieving socio-economic development (Williams, 2017).
Generally, infrastructure development projects require huge capital outlays from funding agencies, i.e. companies, governments or international development organizations. Thus, good project management practices need to be adopted to ensure project success is achieved while creating increased shareholder/stakeholder value. However, many infrastructure projects often attract initial excitement and late disappointment. It appears that all over the world the poor performance of projects and the disappointment of project stakeholders have become the rule and no longer the exception of the day (Ika, Diallo and Thuillier, 2011; Amponsah, 2014).
A study in 2012 by Stadish Group International (2013) into IT projects worldwide found that 18% of all projects are cancelled before they are completed. From the completed projects, 43% fail to deliver the expected cost, exceeding in an average 54% the original cost estimates and 74% the time estimates. On the success side, only 39% of the IT projects are completed on time and on budget. In fact, IS/IT projects failures in the US are many. This has motivated both practitioners and researchers to investigate the problems behind such failure (Patanakul, 2014).
In Africa, majority of World Bank’s projects has been observed to be either a total or partial failure (Heeks, 2005; Aziz, 2013). An example is the Chad-Cameroon Pipeline project funded by the World Bank. The project which cost US$ 2.4 billion was abandoned in 2008, citing misuse of revenue by the Chad’s President (Fabian & Amir, 2014). Consequently, Official Development Assistance (ODA) to Africa declined between 2014 and 2016 and has since remained relatively flat. Africa’s annual financing needs have been conservatively estimated at $130 billion for infrastructure alone. Meanwhile, available resources cover less than half of this amount (OECD).
Ghana has since the 1960s extensively depended on foreign aid (grants/loans) to supplement its national budgetary allocations in the pursuit of socio-economic development. The flow of aid into the Ghanaian economy peaked at US$ 1.3 billion in 2008 making Ghana one of the largest recipients of aid globally at the time (OECD/DAC, 2008). However, with Ghana attaining the status of a lower middle-income country, sources of concessional funding, from development/donor partners, have reduced drastically (World Bank, 2010; Ghana Statistical Service, 2011a). Nonetheless, Ghana still depends on foreign aid. 85% of local government budget expected to come from Donors (Citifmonline, 2017). Ghana’s 2019 budget hinges largely on donors funding. 73.9% of the allocation for capital expenditures is expected to come from development partners (Newsghana, 2019).
Ironically, many infrastructure projects in Ghana record low completion rates or fail to achieve cost, time and quality objectives. In Ghana, the President (Joy News 2014) and even parliament (Citi FM 2014) have complained about unfinished infrastructure projects. In 2016, the World Bank disbursed $1.14 billion to fund 20 development projects to tackle some of Ghana’s challenges including education, water and sanitation, energy and health infrastructure. Just after a year of the projects’ implementation, a Senior Operation Manager at the World Bank, Dr.
Beatrix All-Mensah, observed that seven of the 20 projects that were implemented could be described as “problem and potential problem” projects because they had dire implementation challenges. According to the Country Portfolio Performance Review (CPPR) report for 2017,
$472.79 million of the total commitments by the World Bank remained undisbursed as of March 28, 2017.
