Challenges in the Era of Globalization - iaabd

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Proceedings of the 12th Annual Conference © 2011 IAABD Abstract Governance of Public Investment Projects in Ethiopia Asmamaw Tadege Shiferaw, asmamaw.shiferaw@ntnu.no Norwegian University of Science and Technology, Norway. Ole Jonny Klakegg, Ole.jonny.klakegg@ntnu.no Norwegian University of Science and Technology, Norway. In the recent years, Ethiopia has experienced relatively high level of economic growth and the government is implementing large number of public investment projects. However, there are concerns about the relevance and sustainability of these projects. This paper maps and reviews the front-end project governance system of Ethiopia and identifies the most important front-end challenges of public investment projects. The findings indicate that the top-down project approach, lack of mandatory control gateways at the front-end and weak links between project stakeholders affected the effectiveness of the project governance system. Being unable to identify the key priorities of the society and lack of commitment from key stakeholders are identified as the most important front- end challenges of public investment projects. Introduction Demand for public services in sub-Saharan African countries is increasing continuously due to the improvement in governance and awareness in the region. However, poverty, lack of basic infrastructure, and poor industrial development are continuously hindering the ability of the nations to meet this demand. This is exacerbated by lack of transparency, lack of legal and financial frameworks, and poor capacity in managerial and technical expertise (Gidado, 2010). Ethiopia is located in this region with fast population growth and high public service demands. In Ethiopia, private sector services are not developed enough to satisfy the needs and the demands for public services. To reach these high demands of the public, the Ethiopian government has been planning and implementing several public investment projects. During the last ten years, many public investment projects have been implemented and some are in progress. Many others are also planned for the next five years. The Ethiopian government is used to set medium term development plans and the strategic objectives are economic development and poverty reduction. Using these plans, different sectors have prepared detailed plans and programs in the theme of economic growth, agriculture and rural development, human development, infrastructure development and governance (MoFED, 2006). A grand housing development program, road sector development programs, health sector development programs, education sector development programs are some of the programs implemented by different sectors to improve the public welfare. Under these programs many projects are designed and implemented in order to provide goods and services to the public. However, project development in Ethiopia has experienced problems at the planning and implementation stages. Different studies at the Ministry of Finance and Economic Development (MoFED) indicated that there was no system that checks the links between the project objectives and the government strategies. Wastage of resources and redundancy of projects were common (MoFED, 2006). To minimize the wastage of resources and eliminate redundant projects, MoFED has tried to revise the system and adopted tools to appraise, monitor and evaluate public investment projects. However, projects still have problems related to usefulness and sustainability. 742
Challenges in the Era of Globalization Edited by Emmanuel Obuah This paper examines the causes and symptoms of inefficiencies in the project governance system of Ethiopia and finds the most important front-end challenges of public investment projects. The research has questions like what are the most important problems leading to lack of relevance and sustainability in public investment projects? How the project governance system is functioning? What are the major factors that affect the efficiency of the front-end governance system? The answers to these questions help to map and review the project governance system in Ethiopia and help to ensure that we are doing the right projects. Contextual Review and Economic Development in Ethiopia Ethiopia has total land area of 1.1 million square km with a population of about 82 million. It has federal system of government. It comprises the federal government, nine administration regions and two chartered city administrations. The government is made up of two tiers of parliament: The House of People’s Representative and House of Federation where political leaders are elected every five years. The executive branch includes a president, Council of State, and Council of Ministers. The Ethiopian economy is based on agriculture, which contributes 42% to GDP and more than 80% of exports, and employs 80% of the population. The major agricultural export crop is coffee, providing approximately 26% of Ethiopia's foreign exchange earnings. Other traditional major agricultural exports are leather, hides and skins, pulses, oilseeds, and the traditional "khat," a leafy narcotic that is chewed. Sugar and gold production has also become important in recent years (US Department of State Bureau of African Affairs, 2011). According to the Ministry of Finance and Economic Development (MoFED) reports the Ethiopian economic activities have shown a healthy growth over the last fifteen years. On average 10 percent growth rates are registered between 1996 and 2008/2009. In 2010 the annual growth rate was10.4 (US Department of State Bureau of African Affairs, 2011). This recent growth translated the GDP per capita from US $102 in 2000/2001 (MoFED web site, 2011) to US $ 390 in 2009/2010 (World Economic Forum, 2010). The economy has, therefore, been in robust growth trajectory in these years. During these periods, the government has prepared and implemented two macroeconomic programs and the third one is on progress. These programs are Sustainable Development and Poverty Reduction Program (SDPRP) from 2002/2003 to 2004/2005, Plan for Accelerated and Sustained Development to End Poverty (PASDEP) from 2005/2006 to 2009/2010 and the ongoing Growth and Transformation Plan (GTP) from 2010/2011 to 2014/2015. Under SDPRP and PASDEP programs the country has implemented different major public investment projects. These include the construction of 23 new universities and the expansions of 10 others, the construction of many primary and secondary schools, the construction of thousands of health centers, thousands kilometers of road construction projects, water supply projects, extensive housing development projects, hydro power projects and others. Compared to the previous background of the country, in this period many public investment projects have been initiated and implemented. The number and the types of projects are extraordinary and significant achievements have been recorded. But considerable weaknesses are also observed both in the project concept development and project implementation processes. Public Investment Projects in Ethiopia Projects are policy implementation tools using limited available resources (finance, manpower and materials) for accomplishing development programs (Cusworth &Franks, 1993). How to identify the right projects, how to prepare them through to successful completion and how to operate and maintain them afterwards is an important issues to be considered for marshalling a countries resource’s for development (Baum & Tolbert 1985). In Ethiopia, the concepts of public investment projects have been initiated from different parties. These include the government, sectors, private investors, civil society, aid agencies, donors, banks, NGO, and others (MoFED, 2006). These sources of projects in Ethiopia are classified as 743
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Table of Contents Challenges in the
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Lennart Bangens, Goteborg, Sweden C
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Local Steering Committee Jacob Musi
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Abstract Challenges in the Era of G
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Abstract Determinants of Bank Lendi
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Empirical Results Challenges in the
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Table 3 Determinants of Competitive
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Research Findings Challenges in the
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Abstract: Study on Africa Governmen
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Abstract Challenges of Oil Revenue
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Conclusion Challenges in the Era of
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37. Provision of sound education fo
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Abstract The Changing Requirements
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Abstract Gender, poverty and sustai
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Figure 1.1: Spread of directorships
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Theoretical Framework Challenges in
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Single 18.1 Masters and above 35.3
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Source: Field survey, 2010 Table 3:
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Discussion and Conclusion Challenge
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Abstract What does Globalization me
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Banks in Ghana Challenges in the Er
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Relationship Commitment Total 1264.
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