University of Nigeria Research Publications

OZOR, Stephen Agu

Aut

hor

PG/MBA/99/30606

Title

Appraisal of Project/Programme Management in the Developing Countries

Case Study of National Electric Power Authority (NEPA) Enugu, Nigeria

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e March, 2001

Sign

atur

e

A PPRAISAL OF PROJECT/ PROGRAMME MANAGEMENT 1N THE DEVELOPING

COUNTRIES, CASE STUDY OF NATlONAL ELECTRlC POWER AUTHORITY

(NEPA) ENUGU, NlGERIA

OZOR, STEPHEN AGU PG/MBA/99/30606

DEPARTMENT OF MANAGEMENT

FACU LTY OF BUSINESS ADMINISTRATION UNIVERSITY OF NIGERIA

ENUGU CAMPUS

OZOR, STEPHEN ACU, studena in the Deparlrnent of M,lnagetnent and with

Registl-ation Number PGlbIBAi99l30606, has satisfactorily completed t h ~ requircmcnt for the

course and research work for the degree of Masm of Ihsiness Administrario I in Management

The work embodied in this project is original and has not been subrn tred in part or f u l l for

any orher diploma or degree of this or any o[hcr University.

DR. u.$F. EWURUbI I-IEAD OF DEPARTMENT

DEDICATION

M y s i~~ccrc dcdication goes to God Alnligh~y who has made it pxsible for me 10 scale

through [lie htrddie~ aid challengc's o f this s~udy. In fact, I-lc has nrlrtured and baby-seated me

cons~an~lj b) pro\ tding nle with L I W stiength, courage. love, wisbarn brilliance, necessary

whercw~thal, i~ltcrnnl and e x w n a l fi-ienctly variables and above all, the r.lcrnot-y a! all times to

rcmernber wliat h a b been ~ s u g h ~ me in rhe class during examinations.

I am highly dedicated io in! dear wifc. Mrs. Tcssy Ifcoma Oz.,r, who exhibited or

dernonstra~cd hcr wili-ly and ~notherlj 1ka1 ar all times by taking appropri~te care of my Family

especially during my csamina~ion pcriods.

'J'he same dcdication sees to my children:- Nnenna, Chidiebere, I'firnar~yst and the twins -

Crneka and Eberc. M y fondness IU them is unquantiliablc.

1 I-iighly cher~shcd &he p~lot- h i p of' the Mead of Depaflmcr t of management who,

fostirnatciy b e i ~ ~ g my Projccr. Supervisor, guided a d instructed nlc' during the course of nly project

wrk Dr. U.J.F. E~VLIIIIIII'S n~etltodical approach lo issuescspecially as 11.: handled us carefulIy as

a L~cturer of the course - OPERATIONS RESEARCH, has extended to ne in fhis projccr work.

In both office aid class engagements, he nwcr disc~iminatd against, rarh ZF, he eshartvl q u a ! love

and dcdicatio~~ to anybody that c a m across him. Even at a p i n t where hc appeared h a d pressed

with workloads or exigencies of duly; he ivoiild always address your prob'cms in such a way that

you would rlor go disappointod.

Anotllcr g,enile~nan of high reputation i s f m f ~ s s c r r E.U.L. Imaga \.tho Randled us in two

sepamc: coutbcs na~nrly: PRODUCI'ION MANAGEMENT, and PROJECT UANAGEMEhT

AND FEASIBILITY STUDIES. Added lo the k t that he has always been busy with chaltenging

jobs both withi11 and outside the Campus by virtue of' his prokssion, he ne tcr displayed any acts

of ~lonchallrt~icy toliards his acquainta~lceb/students. I-le has always, during class activities, made

us to be s x i o ~ ~ h with our academic works by kecping us busy wilh volun~as of his printed course

work asGgnrnents coupled with research ~vorkb.

Other Lecrurers, I an1 highly inclined to acknowledge their wr~rtlth of kno~+!LuEgc,

experience 4 ~ ' ~ r ~ r ~ t i i i t y in their various fields are Dr., E. K, Ikcagwu. Prof. J.A. Ezeh, Chicf P.C.

Unamka, Mr. C. Nwoko and Mrs. bfodebe. Their individual lectures would ~ l w a y s subject you to

knowing their courscs propcrly and would put you in a posi~ion to not anty witllsrand the

v

complcxi~ies of examir~a~ivrs conditions b u ~ also compele favourably wit i conrelnporaries liom

other Universities on point or areas of academic displays or exercise.

, >

I he contributior~s 01' Mcssrs. A , Ike, G. Ozoudc and Mrs. l3.I. Ibmegbu of !he Nursing

Departmm, UNEC, cantmi be over-crnphasizzd. They Iwre really clasjmates that slioukl be

relicd up or^. Tiicy w r e [he confidants that not only jvorkcd tob~thcr I l r the wef,fare of one

another but also had ~ h c co~~cep t sf "Espiril dc Corps" thr~ughoua our perioc.

Outside ~ h c contines of ~liis Ilniversily, there i s anot1it.r person vihom I am spiritually

indcbtrid ro. Slw is klrs. C.A. Ilouga, variously and pqmlarly known a? "IJERE'', Mother of

SI-IMB", bscausc nf her kind disposi~ion to mankind. My sincm prayer to God is nor only to

sustain Mrs. llougn's family to reap the fruit ot'lier labour but also to raisr. marly llougas for tit :

sakc of mankind. Other sincere conttiburors to my projccr work included ulr. J.1. Okuta cvho is

the Head of Planning and Construction and Mr. Aniowo who is the Pul lic Rela~ions Oftker

(PRO) in rhe Narional EIec~ric Power Authority (NEPA) Enugu Headquarter:.

ABSTRACT

I n both developed and &\eIoping countries o(. the world, i r dividuals, households.

organiwliom, i~lstitu~ions, gwernmcnt\ such as Local, Srate and Fcdert.1, do embark on daily,

weekly, rnonrh!y. and annual yxojec~s!progranlmcs

Such pmjecls scrw xi guides, QO~IIICR, checks and d~rcclors agai:~st undue excesses in the

behavio~~ral and espcndiruw patterns.

Haking rcalizcd [he irnpurkincr o f projects espsi;illy in !he developed countries, the

researclier 1211 r h u nctd IU hand te !lie project 'lopic fw the ptrrposr-s ohtn dewlaping countries like

Nigeria thus using Nario~wl Elcciric P o w r Authorizg (NEPA) Enugu I-Ieadquarters as tlte case

-. study. Ills rtasun for choosing rhis topic, nhich o f course was approved by my Projeer

Supemisor, Dr. U F , Ewrlninl , was to see how the worthwhile- ness 11f the benefits accruable l a

thc advanccd nations can be applied to the developing countries. In try ng to carry oufi this project,

the rese;-1rchcr adopted both descriptive as \\dl as historical concq 1s through the use of data

collected Lrorn both primary and sccorldary sources. In n-aching, ou: the people, the researcher

used research questions. construciud questionnaires, n~km sarnplin,; techniques for population,

sj~mboi,. c h a m and tables. The dala or inlbrnlalioo so collafed wen crirically analyscd and they

enabled the researcher to make his findings, co~~clusions and recommc ndalions.

I lopefully. lk findings, eonclrisions and lecornrne~~dn~ions f properly utilized wil l go a

lory i fownrJs bringing &h.velopment in the a r a s of infi-a~itructure, ifidustry, research,

profhion, social ssrviccs. Paraslatats and skills acquisitior~ in t le developing counlries like

Nigeria.

TARLE OF CONTENTS

Cover Page.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . i

. . . Dedication.. . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , I I I

13achgroui1d o f S tudy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Statement of the l ' rub le~~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S Qbjectives of Study.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I (I

. - - T Sign~frcr~lion ot Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Research Quesriuns.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Dcli~~it ion oTTe~tns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 4 Revit\\- of Related Likrarure t t r ~ c l S t . l r ~ ~ m a r y ill C'llapter Twr . . . . . . . . . . . . . . . . . . . . I0

. -,, - <

iLlc.tl~otlology oi C 1q)tt.r 2 l 1 1 . t ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Dara Pscsen ta~ io~~~ , fnalysis i t ~ ~ d In.tt.rprcraiim In CIlllaptcr I: DLII . . . . . . . . . . . . . . . . . . 19 . T U I I I I I I ; I I ~ of Findings, Cm~111siims 1111d I<ecollirl~end:~tions in Chapter Five..20

I.,itci~~tu~.e Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 1 Ow-vicw of Prcljc.ct/l'1.ogr-a1l111-~e .App~'aisal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 1 (T)rigin and Defini~ion of l)~.uject/l'rogra~~lri~e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 I Prqje~t/Pr~ogr:r~i~~~~~e Evaluation, Scope a t ~ d C o ~ ~ c e p t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 How I'rqjeccs are Located and their ' l 'ylxs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Haw projects are Prepalwl. . .2') i? Estimating tht. Inlpo~.tance and &.net7 ts S u m Prqjects/Prrs! .rttmuncs. . . . . . . . . . . . - > A -, - Objectives of making a lbrojcr.cr/l)rogrn~~l~~~c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..)>

Factors which hinder the development of' I)l.qje~.1/Prngrani ne in Nigeria since Indqxndencc to date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Breakdown of Pt-ui~cts/i'rog,rianir~ii: Costs.. . .40 Appri"sal Techniques ol'a l) i .s j t .ct / l '~.o~ra~~~n~e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Con~pal-ison of C'hnrncttristir. Featur-es of Prqjt:~til'~-ogi.a~~.in~ l)ee9cloprti

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and L)cvclopir~g Countries. .bX . . . . . . . . . . . . . . . . . . . . Sorw I'rwjec~s Executed in the Pasf and tlieir c.'on~parisori 5 . . .78

Some I-essons on 1'1-ot;ranlnls Kclatod i levelop~~lcr~t in Selxtetl I .east 7 -

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . De\:cloperl C~~mt l . i cs . . .b>

Rest;.mIl Design and i~lccl~otlology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SS Nature of'llle Study. . . . . . . . . . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S Sourws of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S8 ( i ) I'ri~r~ary Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88

(ii) Secondary Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . .YS Pnpulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .X9 111re1-view Questions nlld Mefllod of Qiresaionnai~~c C'oi~strucli J I I . . . . . . . . . . . . . . . .89 S m p l c Used and Il)ctsrrrri~~atiot~ oI 'Smple Size or Number r . l ' ()~rcstionnajres.. . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . .W h,lctliod li)r thi' allocatrm O ~ ' Q L I C S ~ I ~ I I I I ~ ~ ~ I . ~ : !{I t h ~ ' D ~ ~ I ~ ~ ~ Y I I I c I I . s . . . . . . . . . . . . . . . . . .O I

. . h;li.tliod (.)I. I ~ i v c s t r ~ a t ~ c m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92 Vi~l id i i l io i l of' Rcsea~.ch Inst~v~ncrlr.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93 Statistic.al h4ctfiod of Data Allnlgsis.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..% Sio1 )~ oi' tile S l ~ ~ i l y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3 l .irnil;i~io~l of' lhc Study.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95

5.0 I I I 0 ' I - I S O I ~ I I I S I ~ I I I I ~ I I ~ . . . . . . . . . . . . . . . . . . . . I06 * .

5 . 1 r - l~ldi r l~s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 00 5 . 2 Cowlus i r~n . . . . . . * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 5.3 I i eco~nrnc~~t In t io~~s , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 10

1 '

5.4 Areas for Fuid~er Stiithes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 12 Bibliuqraphy.. . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l 15

L

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix. . 1 17 Qucstiarlna~i-c.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 17

CHAPTER ONE

1.0 1NTRODUCTION

1. I BACKCIIOUND OF STUDY

'['he early or priln~tive man ini t id ly s ra r td living his life by wandering in search of

frui~s iind animals I'W his nomadic s u ~ ~ i v a l . By ihcn, he had not m i p p d out projras or

progranilne that could suslail~ h i h living beyond daily subsis~cnce. As limc went on,

irivenrivcness, crcarivity, conscientioi~s living as r w l l iis symbiolic living and exchange

mct~hods prevailed. Thereafter, thc ages of science, management, rational thinking,

innovation and technology came into exigcnce.

I h c WCCllt dcvrloprnont in science, ~cchnology, narural ind human rcsourccs,

crcalcd some awareness whereby Inan started to nunure horinont illy ancf venically h e

developmental conceprs with a view to crca~ing man's envirorinxntal as well as global

! i \ ing. By so thinking, new d~lnensions srnl-ted 10 emerge.

Such dimensions as the Hanging Gardens of Babylon, the f owns of Australia, the

Pyramids of' Egypt, thc Ilqueducts ot Rome, thc Temples of Inc is, the Great Walls of

China and the Cathedrals of Ch~istiar~s were but a feiv of the work! known edifices which

up t i l l today ponder h m a n minds in terms of origin and construct onal accumcnship [hat

acwrd these co~mrrics wondtrful repuratiun. Related to the above legends, there were

great men who w r e gifted with cer tai~~ talents and discoveries and manngcmcnt am. In

Rornz, Greece m d China, thew were grcat mcn like Socrate ;, Plulo, Aristolk and

2 El

Hammurabi. These men were great thinkers, dcsigners, philosophers and engineers who

were able to sustain their countries during the great tribal wars and historic moments. I

During the first and second world wars, projects in terms of appraisal or evaluation

were necessary to ensure accuracy of military operations against enemies. This

development conseq~~ently descended to both Eastern and Western blocks with great

inventions, discoveries and scientific break-through especially in the industrial Countries

of the world.

Development in the areas of science, education, Health, Agriculture, Industry,

Aviation, Road, Water, Electricity, Human and Natnral Resources, started to take place

globally, nationally, stately, locally and communal based levels especially in the

industrialized nations of the world. These developmental concepts gradilally attracted the

attention of the developing and less developed countries including Nigeria through

interactions and exchange programmes. These developments from the donor agencies of

the developed countries to the developing and less developed nations came in the form of

grants, financial assistance, technical assistance, exchange programmes and technology

transfers through the multi-national Corporations. Such agencies always exhibit conditions

and frame o f guidelines on those projects or programmes that have to be adopted by the.

benefiting countries under specified periods of time.

Having imbibed this developmental concept, almost all the countries of the world

have adopted one form of project programmes or the other. Every year, projects are

mapped out during budgets. Such projects/programmes could be of short or long term

nature, though, depending on priority and adequate resources to effect their

implementation, and are allowed to stay for purposes of beneficial imract and posterity so

that the world ~vould recognize them every year as their individual pe-iods role by. Such

projects, worldly acknowledged, includc the following: the Red Cross Day, the Children's

Day, Health Systems Fund, the Health for all by the year 2000, and the World Population

Day. In Nigeria, which is one of the developing countries, the essence of the project topic,

"Appraisal of Prc$ecr/I'rogranime management in the developing courtries" is to examine

bihy project and its appraisal is not as effective and efficient as it is in the developed

countries like Japan, Israel, United States of America, lndia and Br tain. In Advanced

countries, resources are heavily committed. In the same vein, finance, material, equipment

and other infrastructural facilities are taken care of. The environment t as to be explored to

avoid pollution. The appraisal techniques have to be adopted rigidly. The time frame has

to bc maintained. The merits and demerits have to be compared to see the essence of its

worthwhileness or otherwise. That is why so many well-managed anc evaluated projects,

the world over, have become tourist centers and comniand not only respect but also

revenue. The developing countries of the world lack maintenance c ~lture, the technical

&ill or the ingenuity; the appraisal techniques of project management dedication to duty,

and the ability to think out creatively, innovatively technologic all^^ and scien~ifically.

Those, ho%ever, who have the acumenship are not humanly s~pported and duly

encouraged by government because of the financial as well as material i:ommitments.

Since after the Nigeria's Independence, Nigeria as a nation, n spite of series of

political instabil~ty occasioned by Military dictatorship, has been t r : h g to manage her

affairs through several developmental projects/programmes. It is on record that

unmonitored, i~nappraised and uncontrolled projects or programmes in Nigeria have given

rise to series of these projects of developmental importance not to .~ttain goals for which

t h q were meant. The first of the development plan was the 196::-1968, which has its

long-term objectives as self-sufficiency in economic growth. The stcond was 1970-1974

aimed at faster economic growth, national and political autonomy ancl greater social equity.

The third plan \\as 1975-1980, which was an amplification of the second plan with its

objectives to increase real income, reduce unemployment, balance th: development of the

regions and increase participations by citizens in ownership and management of productive

enterprises. The fourth plan was 1980-1 985 in addition to the objectives set in their third

plan, amplifies the dcvelopnient of technology, increased productivit;~ and promotion of a

new and better attitude to work. An inroad into the evaluative aspect ~vould reveal that the

above development plans have not met with the desired objectives.

This, obviously, goes to show why the most enviable Compa3ies or Corporations

like the Peugeot and Assembling Plant of Nigeria (PAN) at Kaduna, the Leyland Factory at

Ibadan, the Volkswagen Plant at Badagry - Lagos, the Anambra hIotor Manufacturing

Company (ANAMCO) Enugu, the Iron and Steel Development I ke the Delta Steel

Company at Alaja - Ajaokuta and the Petroleum Refineries and Petro-Chemical Industries

at Port-Marcourt have not been able to stand on their feet without tech~~ical and managerial

know-how from expatriate overseas. In the same vein, many government owned

Parastatals like the Nigerian Telecommunications (PLC), the Naticnal Electric Power

Authority (NEPA), the Nigerian Postal Services (NIPOST), lhe Nigerian Coal

Corporation, the Nigerian Railways Corporations, the Nigerian Airdays, the Nigerian

Ports Authority, the Nigerian Shipping Line, the Nigerian Bre\veries, the Nigerian

Custo~ns Services and the Nigerian National Petroleum Corporation ( WPC) suffer unduly

hence constant reengaging of expatriates especially in the Nigerian 1:aiiways Corporation

and rhe public anxiety for privatization now on course.

It is on this trend that I have to mention some of the projects mapped out for

execution by the past military regimes and see or explore how far the! have faired towards

attaining the set objectives. The projects are:

The Chalawa lndustrial Estate at Kano

The Trans-Ekulu industrial Estate at Enugu

The Trans-Amadi Industrial Estate at Port-I 1nrco~11.t

The Yaba Industrial Estate at Lagos and

The Kainji Dam Electricity Project in Kward State

Besides the above projects, five Water Basin Developn ent Projects were

established at Lake Chad in Borno State, Uzo-Uwani in Anambra Slate, Owerri in Imo

State, Port Harcourt in Rivers State and Oshogbo in Osun State. Ali these Basins were

mainly for the development and expansion of agriculture with the he p of the rivers and

arable lands therein. Apart from industrial development, research centers located at

Oshogbo, Owerri and Zaria, there were schemes created towards developing these sectors

and they include the following:

The small scale industries credit scheme

The Agricultural Credit Guarantee Scheme

The Research Institutes at Oshodi, Lagos and Proda, Er ugu.

The Approved users schen~e and the Approved Manufn :turers Scheme.

l h c : Companies Income Tax (Accelcrated Depreciation'

The Customs Duties (Dumped and subsidized goods) A:ts o f 1958

The Tariff reliefs and the import reliefs as well as expor: reliefs.

Within the period of Military governance, there were many pro jx t s that were set in

motion. These projects include: -

The Green Revolution

The Land Army

'She 1977 Technicn! Aids for Nigerians to study oversea8;

The 6-3-3-4 Education System

The Structural Adjustment Programme (SAP)

The Federal Economic Advancement Programme (FEAF)

The Federal Low Income Housing Estate established in ; lmost all the States

The Operation Feed the Nation.

There are presently other projects set up by the Obasanjo Administration to correct the

imbalances in the both private and public sectors. They are the Hiiman Rights Act by

Oputa Panel, the Akalnbi Panel, the Anti Corruption Act, or the Christ1,pher Kolade Panel,

the from Poverty Alleviation to Poverty Eradication Programme, tl e Basic Education

System or programme. All these devices if well implemented, man: ged and monitored

will yield enough dividend hence "Democracy Dividend",

In the public sector, there bere abuses of official ethics. Workers were not

interested in these projects which were mainly intended to create funds for undefined

consumption. To ensure the continuity and safety of these schl:mes, the following

Commissions or Committees were set up to enforce them:

The Tudor Davies Commission of 1945

The Sir Walter Ilarragin Commission of 1946

The Cab Miller Committee of 1947

The Gorsuch Committee of 1955

The Mbanefo Commission of 1959

The Morgan Commission of 1965

The Adebo Colnlnission of 1970- 197 1

The Udoji Commission of 1973- 1974

Others include Dotun Philips Commission and Ayida Pane! for Civil Service.

Ail the already enumerated projects or programmes were intended to improve the

environmental spheres of man but the questions bordering us, Nigerians, are that these

projects whose intentions were well designed have been misconstru:d and turned into

areas of money making. This is why some of the projects have been left to waste away

without maintenance. The reason is that instead of patriotic intentio I , it rather became

selfish motive hence the wasted or forgotten projects like the Shagari F2deral Low Income

Housing projects spread almost all over the Local Government Headq~larters which roofs

and wdls have been destroyed completely: the Indiscipline concept whi:h has been abused

by the 4 19 syndrome practitioners; the Structural Adjustment P rog r~n~me which has not

srirvi~ed its test; the Land Army which has engulfed huge sums o ' money; the Green

Revolution which drained millions of naira during budgets, and the faclous Operation Feed

the Nation. One would not forget to mention that the following have l~appily met with the

purpose for which thcy were set. They are presently -

The 6 - 3 - 3 - 4 Education System

The Festac Village in Lagos and

The Federal Economic Advancement Programme (FEAP) now s,:raped

Concluding, the developing nations would have turned developa:d if they were to

follow the good intentions of the developed nations by being patriotic, dedicated,

applying the project appraisal techniques in the areas of market, 1 xhnical, economic

and managerial standards.

STATEMENT OF THE PROBLEM

Having observed the onerous tasks this study entails, the resellrcher has no other

option than to list out the statement of problem which this study or research will find

solution for. They are as follows:

i . The problem of not applying proper appraisal techniques such as the

Inspection method, the payback period, the Return cm investment, the

market aspect, the technical aspect, the financial aspxt , the economic

aspect and the management aspect. All the above are what the researcher

has to delve into extensively.

i i . The Problem of [nsu fficient Fund: Many projects a .e not adequately funded

and that is why almost all the projects in the dc'~eloping countries have

huger mount of money after completion than what were earmarked

initially for them.

... 111. Problcm of Time Frame: Here, serious attention ha., to be paid on phases of

the project especially on time frame earmarked fir each phase. Serious

lapses from diverse angles make it impossible for .he schedules to be met

accordingly.

iv. Human Problem gives rise to the tendency to misapwopriate funds, material

and technological potentials. The researcher ha: to proffer solutions to

them.

v. The natural problem relates to natural and air disastt rs including all kinds of

pollution and damages. Inadequate geological sr rvey, for example, the

structural problem on the "Ferdinand Enterprise" xoposed Super Market

building at Uwani, Enugu opposite Edozie Street, \~h ich has collapsed and

sagged because of lack of soil capacity to sust in the building. Other

disasters include earthquakes, erosion menace and vl dcanic eruptions.

vi. At times, government policy arising from power anc authority from the man

at the helm of affairs perhaps, to Fwour his r~h t ions without taking

cognizance of whether favourable conditions do e: ist there or not. This

has always been the style of the past Military ret,imes in Nigeria where

Ajaokuta Steel Mill meant to be sited at Onitsha because of the presences of

iron ore between Ugwuoba and Onitsha towns in Enugu and Anambra

States was sent to the present Ajaokuta Iron Steel Mill in the North.

The researcher has to wade into these problems by making use of pilot survey

~vliicli interviewed some staff of NEPA, use of questionnaire, which would be

distributed to the few selected NEPA officials, and finally the Research questions

for possible solution.

1.3 OBJECTIVES OF STUDY

For this project to worth its salt, there must have to be highlighted objectives,

which nere listed hereunder under various subheads:

1. Td Show the Importance of Proiect Programme:

Here, a well managed and fully implemented project brings employment

opportunities of various dimensions, brings infrastructural development such as

Roads, Electricity, Water. Communication, transportation. It also attracts social

amenities such as schools, hospitals, churches, markets, fir ancial institutions and

industries.

2. To I-li2hlight Problems Militating Against Effective Imple~ns~tation of Pro-iccts:

7 > I hese problems could be in the form of natural, human, ;\ct of God, and other

contingencies.

3. To Recommend .4ppropriate Measures of Arresting the Probl :=Enumerated

To arrest these problems, care should be taken to avoid :buse of funds, use of

funds, use of unqualified personnel. There should be prope- feasibility studies on

Lhe projects. All the appraisal techniques must have tc be adopted rigidly and

sequentially too.

4. To Show the need for innovation, creativity and technological break throughs

Scicnce, innovation, creativity and technological breakthrmghs are the bedrock of

industrialization. That is why most of the industrialized countries of the world,

which have imbibed the above named cultures, have always been known for their

wonderful discoveries and models.

5 . To Encourage Professionalism, Consultancv and Competiti,/eness

Two objectives of this study is to encourage professior alism, consultancy and

competitiveness amongst countries of the world. Malagerial efficiency and

effectiveness should as well be encouraged. Application c f all the above qualities

on projects/programmes will ensure durability and adapt:tbility especially in the

developing countries.

6. To Create Favo~~rable Climatic Conditions Between the Del eloped and

Developing Countries

This is necessary so that the developing countries can feel the impact of

technological transfers from the advanced donor agencies of the world and through

the multinational corporations. For example, if the de~eloping countries like

Burkina Faso, Yemen, Guinea Bissau, Bhutan, Botswana, Cape Verde, Maldives,

Uganda and Nigeria can imbibe the cultures exhibited, by the developed countries

like Japan, Israel, USA, Greece and Rome in the project management. There sliould

have been a very much difference.

1.4. SICNFICANCE OF THE STUDY

Lack of viable and well-managed projects in Nigeria makes this nation not to

imbibe the culture of project management. For the fact that few Nigxians at the helm of

affairs do not know the importance of projects and have negative view on them; they

usually divert thc funds meant for a particular project to another less meaningful ventures

from lthere the fund i v i l l be dissipated away to their selfish ends thu: giving rise to many

phases of corruption.

Based on this irresponsible act by some unpatriotic people, thl: research intends to

highlight some of the gains accruable to well manage projects and the losses thereof on the

ill-managed ones. A well-managed project brings development to the affected areas. The

resources invested on it are appropriately utilized. Such resources lilce financial, human,

material and ndlural are always involved and each individual contrib'ition on a particular

project is normally recorded and recognized.

A well managed project/programme will show at a glance a ell-arly defined project

in terms of how much money that has been injected or earmarked, tke time frame or the

number of days, weeks, months or years the project will be accomplished. It will also

show the type of machinery and equipment that the project will need ind the sources that

supply them.

In a more expanded form, projects will show the extent of the benefiting nation or

communities, the type of agencies that will offer grants and the tyrle of grants. Such

projects if properly managed and executed will attract infrastructural facilities as well a s

health, financial and educational institutions. For example, if Oji Rivtr power station and

Afam Pomer Station were to be fully harnessed and maintained, th.: issue of incessant

power failures especially in the Eastern States will have reduced trcmer-dously.

1.5 RESEARCH QUESTIONS

Most of the ideas projected in the questionnaire would be extraacted from the related

literature review including objectives of the study. The extracted mat er however, will be

translated into the main research questions and will be later analyzed avid reviewed through

the respondents in the subsequent chapters. The areas of importance and worth

considering, border on the importance of project/programme in :he developing and

developed countries, problems associated with it, benefits derivable from it, people's

understanding of the project, the main objective and project/progran~me, contributors or

collaborators of project, factfirs involved in project/programme manayement, whether it is

advisable to abandon the policy of project/programme management or to adopt it. As they

came from the pilot survey or the structured type of questionnaires, thl: responses from the

questionnaires actually tend to show the true image of the research especially during the

process of validating the ressarch.

The research questions are as follows:

i . How far do people in Nigeria understand the meaning a r ~ d its appraisal?

i i . Are the main objectives of the project including it significance being

realized in the NEPA Eastern Zone?

. . . 111. To what extent do the activities of projecdprogramme management

influence the economy of the area where they are locatell?

iv.

v.

vi.

vii.

... V I I I .

is.

Who arc ~nostly benefited or are the benefiiaries of the project

management?

Who are the collaborators or contributors to the project management in

Nigeria'?

What are the factors or items involved in ,he projectlprogramme

management'?

What are tllc major problems encountered in the p r o j x t management?

Is it necessary to abandon the policy or to adopt the policy of

project/programme nianagement especially in the ckveloping countries like

Nigeria?

t i o ~ v far does project/programrne management influence the economic

development of the developed countries?

1.6 DEFINITlON OF TERMS

i) Appraisal: Oxford Advanced Learners Dictionary Cur-ent English by A.S.

Hornby, third impression 1981 page 37 describes appraisal as t l ~ e art of saying what

something is worth. I t is a process of evaluating any ilndertaking such as business, persons

and objects with a vie\\ to getling the good or bad side of it. In ternis of project, appraisal

shows the extent of project/programme performance.

i i Project: Oxford Advanced Learners Dictionary of Current Erglish by A S . Hornby

page 667 describes project as plans for a scheme or undertaking, for example, a project to

establish a new national park. Make plans for a new dam or water wt rks. A project can be

described as an earmarked item meant for execution with the neces a ry actualizing items

duly involved in the process. Such can be in the form of school, h~~spi ta l , road, church or

monument.

iii) Programme: A programme can be described as a long project, which can be

segmenled into units for specific implementation or exext ion. However, in a

Church building programme, certain items may be more prioritized than others,

for example, in the Church building programme, the (:hurch proper and the

parsonage may take more attention and priority than the ancillary units such as

the nursery school for the children, the visitors building and the necessary

expansions. The four-year developinent plan already me ltioned can be likened

to a programme.

iv) - Management: Dictionary of Social Science by Could .md Koll 1964 edition

describes management as a process of formulating and executing business or

individual policy, the fi~nctional activities o f planning. organizing, directing,

coordinating and control. F.W. Taylor describes manal,ement as discovering

how tasks should be performed and seeing that they were performed in the most

economic way. K o o n t ~ and C. O'Donnell described management as the

function of getting things done through others.

C. Kerr, J.T. Dunlop, F.1-I. Harbison and C.A. Myers obsxve that management

is more than the mere sum of its members. It is an i~~tegra ted hierarchy of

people with differentiated functions hhose activities r n ~ ~ s t be coordinated to

achieve specific objectives. In terms of project/programme, I regard

managmcnr as a process of' integrating and coordinating ill the related items in

a project.

v) Developing: This term is mainly used to show the deve opmental position of

Nigeria in the world developmental strata namely: Developed, ceveloping and under

developed. With this position of Nigeria as a developing count1 y, project/programme

appraisal will help to idcntify Nigeria as one of the participator. or otherwise of the

concept u f project management. In a developing world, therefort, project1 programme

appraisal appears not so effectively and efficiently managed as I:, be compared with

countries like Japan, Israel and India.

vi) Countries: In the whole world, the word "country" denotes I region which has its

autononlj, regional territory wi th its sovereignty and must, however belong to any of the

following morld developmental strata: Developed, developing and the under developed.

The Advanced Learners Dictionary of Current English by A.S. Hornlay page 196 describes

Country as land occupied by a nation. Land of a person's birth or citi: enship.

1.7 REVIEW OF RELATED LITERATURE AND SUMMARY IN C HAPTER TWO

1. Literature: tlere attempt will be made by the researcher to d 4ve or wade into the

real life of the research topic with a view to gaining wider 11ori;on in relation to its

contexts and concepts.

2. Summarv: With the already built up documents, the reader including the supervisor will be in

a position to evaluate to a convincing level that the research's topic alre idy dealt with by the

research under his sincere supervision is ready for public consumption By the researcher's

summary, all the necessary dsvelopmcnts, sources of information int luding data and the

research questions and apparently the hidden citations good for fi~ture lirt ral use, will be made

known.

1.8 hIETHODOLOGY IN CHAPTER THREE

The main reason or purpose of this Chapter is to descri )e the methodology

employed and the techniques of analysis. Here, the historical and descriptive methods

hake to be employed. This ~ v i l l show how the historical aspect goes tc I relate with the past,

present and the future.

i ) Sourccs of Data: The sources of data comprise two types I amely: primary and

secondary data. The two sets of data will make use of both i t dividual and printed

documents from the related flelds.

ii) Primary Data: The information of importance mder this matter will come from the

questionnaire to bz distributed to the National Electric Powcr Authority (NEPA)

officials at the Headquarters of the Eastern District Zone En ~gu. Oral questions

will be as well conducted and obtained from the NEPA of icials as on-the-job

information and experience.

i i i ) Secondary Data: The places of Information from this sector wi l l come from text

books, newspapers, journals, magazines, periodicals and p.ess releases. The

researcher carefully utilized the services of the following Libr iries: University of

Nigeria, Enugu Campus, Ministry of Commurce, Trade ard Industry, Enugu,

Ministry of Information, Enugu, Ministry uf Finance, El ugu, and personal

textbooks from UNEC Lecturers. In vicws of the descriptive ; nd analytical nature

of this project, positions of different authors have to be :arefully analyzed before

arriving at conclusions.

i ) Area of Study and Populatian: The area chosen for this st ~ d y is National Electrical

Power Authority (NEPA) Eastern Zone which co~iprises functional and

jurisdictional areas of Udi, Ezeagu, Awgu, Oji River, En ~ g u North, Enugu South

and Enugu East Local Government Areas; in fact Enugu a1 d its environs. Attempts

will be made to ascertain the population extent of the area being served by NEPA.

The NEPA officials are involved.

v ) Interview Quection/Method of Questionnaire Constructic ?: The main or much

related literature review and objectives of the study provid :d will be translated into

the main research questions. Accordingly, the cpestionr aire will be constructed

tiom the contents of the research questions.

vi) Determina~ion of Sample Size and San~ples: Having ascertained the overall

population of Ihe employees of NEPA under each Depart] lent, the researcher will

then apply the "Yaro Yamani" formula with a view to dete-mining the sample size.

The figure so arrived at will determine the total number of questionnaire, to be

distributed to these employees. However, sampling technic ue has to be adopted for

selecting the respondents for this research. Such responllents have to be drawn

from the literate group to ensure representative ness and acc lracy of purpose.

vii) Method of Allocating Questionnaires: In the process of allc cating questionnaires to

the NEPA staff, there is the need for the researcher to i pply Kumer's formula,

which will show allocation or apportionment of number to each department for

purposes of distribution and collection.

v i i i ) Method of Investigation: The investigative questions caref llly designed in the

questionnaires distributed to the respondents form part of this 2mpirical survey and

should be related to the opinions, concepts and ideas expressed by the respondents.

i s ) Validation of Research Instrument: This is done through the rse of pilot survey to

project the true image of the research.

X) S~atistical Method of Data Analysis: This obviously will show whether it is

statistical or mathematical method that is used in the analysis. Again, it will show

the use of absolute numbers, percentages and tables as the neec arises.

xi) The Limitation of the Study: This portrays all the necessary actors likely to limit

the researcher's ability within the area covered by the case stu~d i .

1.9 DATA PRESENTATION, ANALYSIS AND 1NTERRETATION 3F THE DATA IN

CHAPTER FOUR

This Chapter will concern itself with the distribution and retu n of questionnaires,

classes of respondents including departments in the NEPA, val dation of research

questions and the interpretation accordingly.

1.10 SU,1IIMAKY OF FINDINGTS, CONCLUSIONS AND REC OMMENDATIONS IN

CHATER FIVE

This will be broken into sub-heads as above with a viev to itemizing them, The

findings, conclusions and recommendations will be derived frorr the empirical survey,

respondents' reaction from the questionnaire, duly distributed, and retul led and views expressed

from those interviewed accordingly. This Chapter will also make us: of the contents of the

literature rcvieu especially while forming conclusions and recommendatii Ins.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Overview of Proiect/Proaramme A~praisal

This topic is primarily devoted to apprais ng projectlprogramme

management in the both developed and developing countries of tl- e world. It has to show

the origin, meaning, importance or otherwise, characteristics, resol lrces involved in project

management, roles of project management, problems associated with projectlprogramme : . . '

management,' appraisal techniques, beneficiaries, collaborators, i ' any, contributions and

covernment involvement including community and individuaIs i l the project/programme - management.

2.2 Oricrin and Definition of Proiect/Programrne

The meaning of projectlprogramrne differs and its manq ement also differs fiom

country to country- in the both developed and developing countr'zs of the world. Imaga

(1999) stated that a project is a scientifically involved work pl In devised to achieve a

specific objective &ithin a specified period of time. He went fu ther to s & ~ th&'projects

differ in size, nature, objective and complexity and conform to tht three basic attributes of

having a course of action, a specified objective well defined and involves a definite time

perspective. A project therefore could be defined as any scheme or part of a scheme for

investing resources which are capable of being analyzed and e. aluated or appraised as

independent unit.

22

King (1979 p.3) stated that answering the question of wha a project is, is best done

by examining the following projects: Building a School, Hor pita1 construction, Road

development, Cocoa processing factory, Carpet Factory, Laundry project, Taxi project for

Ibadan township, sales promotion programme and population p .ogramming programme.

A common feature of all the above listed projects is that each inv dves the commitment of

economic resources with the hope of some benefits. This in\ ~ l v e s difference,^ in the

timing of the resources to be committed and the benefits to be re: ped. For all the projects

listed above, the benefits come after investment and flow in d lring the life span of a

project. King (1979) included the following definitions:

The use of one or more scarce resources during a specific I wiod for the purpose of

producing some economic return or output at a later time.

A capital investment to develop facilities to provide goods ( tr services.

The consumpiion in the near fi~ture of scarce or at least imited resources in the

hope of obtqining in return over'a long period, some benefit and : . .

An optimum set of investment oriented actions by meals of which a defined

combination of human and materia! resources is expectec to cause a determined

amount of economic and social development. What, theref )re, matters in a project

are the investment involved and the benefits expected. Fo: example, in Railways,

projects include the modernization of systems by i rnphasizing transport,

coordination, and reorganization of the Railway enterprise by staff reduction and

training of remaining staff and by the modernization of serv ces or revision of tariff

structure and other financial cliarges. The starting point o 'any project is its idea

while the finishing stage is its operation. The activity stage covers a period from

the project idea to the stage where a project is ready for o3eration and this is

referred to as the project cycle. . . . . The origin of project management can, therefore be traced fol owing the events of

second ~vorld wars when the United Nations industrial Develoj~ment Organization

(UNIDO) in Vienna, as a part of the reconstruction effort, went int.) intensive research

about how to develop project. After that period, project was sl:en as unassailable

instrument of National development because given the definition and meaning of project

and project management, was believed by all that of any form of ind st rial development

will manage as a p;oject, that, they will always give an unfailing positik : result.

The definition of programme however follows the same dime! sion. Ferns (1991) : . . '

stated that the term programme has for some time been widely u: ed to describe the

organizing structuro and process used to coordinate directly related pr ~jects. In the same

vein, Imaga (1999) was of the view that instead of managing censin very important

organizational ventures as project that they would rather be manage f as programme in

which the end of one project marks the beginning of yet another project in succession.

2.3 PROJECTIPROGRAMh'IE EVALUATION SCOPE AND CONCE 'T

The three stages of project are considered critical and ar: regarded as the

benchmarks of the project cycle in the sense that n number of other s t a ~ 2s d a y be added in

between. The first stage is the Baurn's identification stage, which is a process of

identifying in a preliminary way, projects which are of high priorit 1, which might be

suitable for a.Bank financing. There are, according to Baum, three s:ts of tests'irivolved in

the identification of a project.

The second stage is the appraisal of the project proposal. "his is the best-known

and appreciated stage and it is the result of this stage, which will de:ermine whether or not

the project proposal will be accepted and implemented or even n jected. It is here that

decisions are made regarding how a project will be constructed cnd implemented. The

essentials of this ptagc include the appraisal of the technical, el onomic, financial and

managerial aspects of a project.

The third as the final stage is the operation of the project. Under this ~brt'text, the

project idea and appraisal cover proposals. In the process of eva uating the project idea,

there are two ways namely - direct and indirect. The project idea is generated from

pressures or problems and requires a breakdown of existing m,.chines, the absence of

certain products from the markets, high prices and high cost of prc duction are some of the

common events leading to project ideas. Traffic jams, frequnt power failures and

shopping problems that could result in project idea.

The scope of project is limited to the appraisal of the contri ~ution of a project. This

. is, however, done by analyzing the expected benefits with the re.cources t6:becommitted.

I t also depends on the efficiency with which the project is e, ecuted and also on the

effrcisncy with which the project is analyzed. The two dimensi ms of project evaluation

according to Kayode (1999) are the assessment of the chances of successful

implementation and the appraisal of the contribution of a project t given goals.

In dealing with this, there is the necessity to call for concepts, which entail

investment criteria such as cost benefit, cost effectiveness, planning programming,

budgeting and capital budgeting. Here, Mishan's (1999) v ie \ / on the answer to the

question "why cost benefit analysis", why not plain honest to ;oodness profit and loss

accounting", is provided on the simple notion of the family th :sis that what counts as

benefit or a loss to a part of the economy to one or more per ions or groups does not . . .

necessarily count as a benefit or loss to the economy as a wh )le. Iir the cost benefit

analysis, we are concerned with the welfare of a defined society a] ,d not any smaller part o f

it. This concept was propounded popularly by the United State: Department o f Defence

and Security under Mc Narnara and it was intended to assist chcices related to the use o f

resources. As a matter of fact, the cost benefit concept calls for a careful specification and

analysis of basic programme objectives in each of the areas of go dernmental activity. The

second requires an analysis, whenever possible, of the output c f a given programme in

terms of the objectives initially specified. The third relates to one measurement of the total : . . ' '

cost of the programme while the fourth and most crucial step is t! le analysis o f the options

with a view to selecting those which have the greatest effectivent ss in achieving the basic

objectives specified in the step one above. The fifth and final step is carrying the four

steps into all areas of budgetary decisions.

While the cost benefit is used in appraising each o ' the projects within a

programme, the planning programming budgetary system (PPBS) approach appraises the

entire collection and essentially the extent to which such a colTxtion helps towards the

attainment of a given objective. The cost benefit analysis is a f nal way of showing that

differences in concepts are not fundamental but a mere reflect on of the complexity of

resource allocation decisions or the difficulty in quantifying the br nefidcost elements.

Naturally, three types of comparison problems are ident fied. The first is where

evaluation is. based ,on benefit maximization with given sets of c osts. Thk s e ~ o n d is cost

minimization with given levels of benefits. The third is when bot i cost and benefit, neither

i s given. The value of benefit and cost. being compared for a g ven project depends to a

large extent on the reasons for embarking on the project whicl in turn depends on the

decision making unit which could be a nation, an individual, brsiness firm or any other

unit within a nation.

The planning agency concerned with this matter has to keep a check on its

implementation. It requires from the Accountant-Gerieral's Depr rtment of the Ministry of

Finance up to date figures of capital' expenditure. It must al ;o be in ?ouch, with the

Ministry of Works and know the latest position on preparation of jrawings, acceptance and

tenders, work in progress and changes in the expected cost. Thi: information is necessary

for the nest budget to be embarked upon. The government, there ore, expects it to find out

ivhat is holding up the implementation of the plan. The plan ag:ncy must therefore have

on its staff experienced progress chasers for example engineers who follow each project

through from design to completion and report when anything is fa ling behind schedule.

Reporting and evaluating should always be put on a reg dar and systematic basis

since this helps to ensure implementation. Reports should co /er both progress in the : . . '

private sector and also the extent to which the public sector is or schedule. These reports

should be seriously studied by the Cabinet's sub-committee on ecc nomic affairs.

Further on project evaluation, Renningson (1979 p.18 ) stated that a strategic : . . '

approach to the design of a project management would first invc lve identifying the broad

goals of the project, important constraints on the project and keys to success for the

management system. In the same way, Hayness and Solomon (1 379) in respect of capital

budgeting in small firms, stated that the three most promising are: s for the improvement of

the managerial performnee espcciafly in small firms are th : search for investment

opportunities, the search for information and the careful estim d o n of the incremental

gains and costs that will result from investments. The literat1 re, l~owever stresses an

entirely different steps in the decision making process: the p .ice computation of the . . .

relative worth of investment alternative. The most reliable yardst cks are the internal rates

of return and the net present value. Both require the use of the cos of capital.

Conclusively project evaluation is intended to aid in. estrnent decisions thus

involving two types of decisions. The first decision relates on wh~ ther or not to invest in a

particular project. The second relates to decision on what arc ngements management-

financial and others have to make for ensuring the successful imy lementation of a project

with the help of data. In spite of the awareness of the importanc 2 of cost analysis to the

success of project, only a few public projects in Nigeria are kept within the original cost

estimates by the time they are completed. Here, it is the norm th;. t the co~plet ion cost of

projects always be more than their estimates. One factor to bear i r mind in addition to the

problem of concept is that the relevant costs in projects analy is relate to the future.

Again, the evaluation exercise is drawn more towards the realm o 'art than to the plans of

science. An unrealistic cost estimate may affect the decision wher ler or not to invest in a

given project. Such estimates could be a major cause of profitat le project on proper

turning into an unprofitable one on the ground. Also, the extent thz t financial provisions

are guided by cost estimate, an unrealistic cost estimate, may affect t le chances of project

completion.

2.4 HOW PROJECTS ARE LOCATED AND THEIR TYPES

The choice of the best size is based entirely on estimated de nand and production

cost. Other factors, which could lead to the choice of a plant size th it do not promise the

lowest average cost are: the life of plant, construction period, geogra ~hica l distribution of

the market (near the consumption center) the expected growth in d :mand, possibility of

operating a multiple shift system, pre-emptive consideration and e Lpectations of future

construction costs.

In the course of locating a project site, one must identify the site options and

recommend the one, which ensures the greatest attainment of the prc ject objective, which

must be of interest to the society. The choice will also depend on wh:ther the, projects are

manufacturing or non-manufacturing and whether they are private or public : projects. . . . The

choice along rivers for a Dam is determined by the features of the va ious rivers while the

choice of the dam site, once a river is selected, is determined largely b; technical factors.

In terms of private manufacturing projects, it is primarily to find the site, which

minimizes the unit cost of production. Even with a simplifiedec objective of profit

maximization, there is till some doubt about the contribution of theor:/ to the evaluation of

a project site. The first approach out of the two approaches assume; a pure competitive

market structure with an unlimited demand for the output of any se ler at the prevailing

price. In this case, the selection of the best site is determined by finding which of the

alternative sites would minimize production cost. The second appr ~ a c h is based on the

assumed monopolistic competitive structure in the product mark:t with an unstated

assumption of pure competition in the factor market. It is however rt levant to understand

- the center of activities thus showing where the costs are incurred find the relationship

among them. Two interesting areas in this case are the place from wl- ich necessary inputs

will be obtained, and the places where the, products will be sold. In assessing this trend,

three types of costs are made namely: cost of transporting the inputs to the plant named

'c" cost of transporting the finished products to the market named c2' and the cost of

processing the product 'c3'.

2.5 HOW PROJECTS ARE PREPARED

In developing countries, the making of development plan usur lly begins with the

Cabinet Office requesting each government department or Ministry to : ubmit its proposals

ichich must be studied in the Planning Agency and the more impor ant will go to the

Planning Committee. The planning agency wiIl find itself reviewing he whole range of

public policy in education, housing, health services, local governme it matters, import

substitution, exchange control, corporation law, tax incentives, land tcnure, land reform,

and other related items.

The bulk of material coming from Ministries will deal with the expansion of

government services. The amount of money sought will be too large a ~d 'much.time will

have to be spent on cutting out the less important, suggesting new schemes or

in~provemcnts in

proposals. Every

those, which have been submitted, and re-c sting the acceptable

Planning agency begins work on a new plan by trying to discover the . . .

potential for developing new industries or expanding the output 11r the productivity of

existing Ministries. The geologists and agronomists are involved.

Assessing the cost of projects is relatively easy when compz red with assessing its

benefits. The exercise begins with the technologists preparing prelinlinary figures of costs.

The choice of locations or techniques must be provided in the estiriates. If factor price

reflects the true relative scarcity of factors of production, the techno' 3gistsY estimates will

show the true cosrs and the cheapest lnode of production is easily ; scertained. If factor

prices do not truly reflect social costs, 'accounting' or shadow prices, nust be used instead. : . . '

Pressing benefits is more difficult, first, because of the greater element of

utrccrtainty and secondly because of the difficulty of assessing exti rnal economies. In

theory, the analysis is complete by finding the most profitable price tc charge and quantity

to sell in each year, subtracting each year's cost, and finding the rat : of discount, which

will equate future net yields with present outlay. In practice, all the :e figures are highly

speculative. Nonetheless, such calculations have value. Government of ~mder developed

countries tends to make industrial investments hastily and optimisticall j . So many projects

are started which could not pass, any reasonably, competent atten pts to assess their

liability. Howevei, if government has reasons for wishing to s :ll delok' cost, its

attachment to the project is likely to be too great to be shaken by cost benefit analysis. If

there are economies of scale and the product is to be sold not at : verage cost but at

marginal cost, a deficit will result. It may be possible to cover this def cit by some sort of

3 1 . . .

supplementary levy on the consumer, varying not with the cmsumption but with some

other index of his capacity to pay. Then, the problem 's to assess whether the

supplementary charge will raise enough revenue to meet the leficit. Alternatively, the

deficit falls on the government budget and the assessment tecomes more vogue. In

extreme cases where the project is very large and will greatly afi x t the level of output of a

whole region for example, transportation or irrigation becon-es necessary virtually to

project the increase in national income which will result from t l ~ e project and subtract all

additional costs required to produce this increase to arrive at the net beneflt attributable to . . . the project. It is important to avoid double counting. If one us :s a low shallow wage in

valuing labour when calculating costs, one must not also, when ;alculating benefits, give

extra credit to the project because it will relieve unemployment. In project analysis, what

counts is not technique; the techniques are straightforward, but h owledge of the industry,

thus involving specialists without which the project analysis is b o ~ nd to be wrong.

The project idea describes what is being proposed, who an ;l how much it will cost,

what the benefit will be, how long it will take and where the rroney might come from.

This is intended to create the understanding in the minds of tl e reader and lead to a : . . '

positive conclusion.

The project strategy covers the following questions:

What is the problem to be solved?

Which group of people will benefit from the solution?

WIlo will collaborate in developing the solution and

tIow exactly will the project solve or contribute to the matte1 ?

In solving the problem, one has to collsider the following:

Why is the project being undertaken?

How does the project fit into any local, regional, national or international

programme.

In identifying the beneficiaries one has to consider the following: -

Which larger group will benefit. Here, there are two ma n groups 'of beneficiaries

from a project namely: the direct (immediate) beneficiaries ar d the indirect (ultimate)

beneficiaries. In the case of establishing a marketing, the din ct beneficiaries of such

project would be the staff of the institution but the ultimate ber eficiaries could be local

small farmers.

In dealing with the collaborators one has to consider the fol

Who will have to cooperate with the project Director if the project

Mow will the beneficiaries benefit?

What will be the project activities?

owing:

s to be a success?

In treating how long the project will take one has to considel the following:

What is the time schedule?

In terms of how much the project will cost, it will be deal to consider what

approximately the project will cost and where will the money con:? from. To be able to

ascertain why the project is being proposed, it is good to idealiz: once concept in the

probable gains thereon.

The successful operation of any project depends on a particul ir environment, which

it operates. In this case, this major indicators of national, po itical,..and , . . . economic

development should be briefly stated. Donor agencies usually l i ;e to get up to date

information on those national development indicator, to guide therl in decision-making

regarding the type of assistance sought from them. These indicators include location and

size of the country, year of independence and type of government, cu -rent p;'oliiicai setting,

capital city of the country, number of States and Local Governme ~t Areas, and finally

population and date of last census.

2.6 ESTIMATING THE: IMPORTANCE AND BENEFIT FROM PROJE :TIPROGRAMME

The reliability of estimates of the future benefits of a project depends as much on

the quality and adequacy of past and present data and the interpreta .ion of the results of

analysis as on the technique of analysis. In classifying the benefits, t lere are two types of

ways of classifying expected benefits namely: the one based on .he measurability of . . .

projects benefits. Five types of benefits can be identified using three types of benefits and

two dimensions of quantification. The sixth type is excluded since t is inconceivable to

have a benefit that is marketable and yet non-quantifiable even if in( irectly. Goodwill is

the sixth type but if closely observed, one will regard it as quantifial le. To this end, the

measurability column could be classified in terms of measurement of difficulty, which

could range from high to low. The benefits most modsst to evaluate a ye those that fall into

the quantifiabk or marketable group. The benefits of a project as se :n by the individual,

need not be the same as those seen by society. : . . '

In the case of road project, the possible projects include savir gs in traveling time,

change in number of accidents, reduction in damages to vehicle, ch mges in patterns of

economic activities and settlement, and finally increased comfcrt and convenience of : . . '

travel. All except comfort and convenience are economic and nl.me of these benefits is

marketable except if tolls were to be collected. Time savings can be easily calculated but

the economic effect of this can only be computed if we have postulates on the use of time

saved. Expected change in number of accidents can be calculated i'we have a distribution

of accident by causes and some postulates about the effect of the better road on each of

these causes. That is why Kayode (1979 p.75) stated that the final : ssessment of the future

market will be made by comparing the figures obtained by the different methods and

weighing up on the and increased earning capacity. : . . '

with regard to beneficiaries, the following will bewfit directly from this

project:

All the officers responsible for projectlprogramme in all Ministries

All officers responsible for projectlprogramme a1 Local, Regional and

National Levels

All officers responsible for international cooperation ~rojects

All planning officers in the Ministries

All Permanent Secretaries . . .

All Directors of Ministries

Subsequently, the following will benefit indirectly from this project: The

population at Local, Regional and National levels. The government and Ministries.

in the case of market of existence, that raw materials cln be reasonable, that

finalicing is available, that local services to support the project art. readily available, that

the social consequences are acceptable and that political suppo-t, if needed, will be

forthcoming. It provides tourist centers in a country.

2.7 OBJECTIVES OF MAKING A PROJECT/PROGRAMME

In reality, the objectives of most public projects are never de'ined. .This is because : . 9 '

an objective is obvious thus showing that some further probing or even a mere

classification may change the conception of projects and in some cases, change the results

of the appraisal exercise.

Indeed, some probing of the real objectives of public project&; and or programmes

will increase the success of government effort. The first example is tile rural section. The

declared objective is usually in terms of increased and or improt:d services such as

medical or educational. However, the emphasis of many of the projects gives the

impression of a significant difference between the declared and latent objectives. A break . . .

down of the capital and operating costs shows that the government m;iy in many cases be

more concerned with the impression of progress that imposing struc-ures or monuments

given than the services actually rendered to society. The usual explanation is that the

architect is responsible for the grandiose design that goes to desire the -ole of the architect

and designers in the appraisal exercise.

The second example is in the industrial sector. It is now common knowledge that

only few of ~ i ~ e r h n governments' indktrial projects particularly the nanufacturing ones

have succeeded. A close ewxamination of the performance patte-n reveals that these

projects' chances of success were higher where there is an industrial Austering than where

a project is isolated.

The choice of location is just one reason for the four results of government's efforts

. in the industrial sector. . . .

2.8 FACTORS WHICH HMDER THE DEVEDLOPMENT OF PROJECT/PROGRA'JMES

IN NIGERIA SINCE INDEPENDENCE TO DATE

In treating this matter, it will be proper to itemize anc or two oul of the four national

developments plans and see what has hindered the effective implementation of one or two

ol'thcm.

Under this context, the third national development plan, 197: - 1980, would be

exemplified. The first and second national plans envisaged capital expenditure of N2.2 : . . .

and N3.2 billion respectively. The original size of the third national pl In was N30 billion.

The third plan in question raised the expectation of the generality o" the people due to

general favourable financial circumstances in which the country found itself on the eve of

the third plan period.

The third national plan was launched against the background of buoyant financial

resources following sharp increase in both the price of crude oil and Nigeria's level of

production. By March 1975, the country's oil production was at a re:ord level ofN2.3

nill lion barrels and stood at $3.56 in 1973. Even at the prevailing price., it was expected to : . . '

produce large financial resources capable of financing a plan of that magnititude.

I Availability of financial resources was'l~ot expected to pose ar y serious problem for the

implementation of the plan.

: . . ' Later the rosy picture of the oil industry soon turned : loomy. Because of the

global depression in the economies of the Western nation's demand for oil, it was

plummeted with adverse consequences on price. Oil producers were there forced to cut

down on output thus making Nigeria's production to drop drastical y by 35% of 1.5 million

barrels a day for five months after the plan was launched.

The price of crude oil fell by as much as 12% thus resultin ; in an absolute decline

of about N1,S 19 million in the contribution of the oil sector to the ('ross Domestic Product

in the fiscal year 1975 - 76, even though, other sectors achieved i npressive growth rates

ranging from 14.2% to 62.5% in that year. The situation also led to an absolutk decline of

about one billion in the aggregate value of oil exports for that year c\ ith similar devastating

effect on the contribution of oil government revenue.

Another round of decline surfaced again in 1978 when prodisction fell because of

fall in demand. These unexpected developments greatly distorted he expected flow of

financial resources making it necessary for the government to engage in massive

borrowing from the European or Euro dollar market and from multilat :ral institutions such

as the World Bank.

The unsettled political atmosphere in the first two years of tl e plan prevented a

smooth take off of the plan. There was a change in government which brought in its wake

a pause in the implementation of the plan which was halted in some States to facilitate

stock taking while at the Federal level, the administration ordered a plat review as early as

October 1975. The new administration also

purge in virtually all the public services of the

: . . - engaged in an u iprecedented and massive

Federation. The udden removal of a large

number of experienced officers all over the Federation whereby affected the pace of plan

implementation.

One of the actions of the government was the creation of seven new States in

February 1976 by breaking up some of the existing twelve State: The exercise led to a

substantial time biing devoted to the sharing of assets among the newly created States to

settle down and for meaningful development programme to be evc lved for them to cover : . . '

the remaining part of the pIan period. The creation of additiona States also helped to

increase the pressure on financial resources for the plan, for the I eed to equip the new

States with necessary staff and administrative infrastructure led to a significant increase in

the level of recurrent expenditure of the nation and a corresponding neduction in resources

available for capital investment. Another factor which hindered the smooth take off was

the abortive coup in February 1976 which later led to the imposition of curfews and such

oiten security corftrol which for a while infirsed restrictions on ~ersonal movements.

Organisations both in the private and public sectors, which were earl:er operating two or . . .

three shifts per day were forced to operate only one shift.

Finally, there were other difficulties such as the notorio~s port congestion,

associated with the "Cement Armada", unabated inflationary presxre and the serious

shortages of material and skilled manpower.

Another aspect to reckon is that it has been posited by a numbel of authorities that

the problem of national development of the so called backward, und :r developed, less

developed, developing or third world countries as these un-industri: lized low per capital

income nation States have been referred to by different authors at different times as a

problem of management of their development programmes and efforts

lmaga (1981) in trying to isolate some constellation of factors hat impair economic

development in Nigeria, came to the conclusion that Nigerie instead of being

underdeveloped, is under managed as.seen from the levels of gross under-utilization of . . .

resources and capacities as well as in the performance of the major arms of the public

sector and public enterprises like NEPA, NIPOST, NITEL, the Rai ways, Airways and

Ports Authority. In the same vein, Ukwu (1985) had x-rayed the pool performance of the

Nigerian Public Sectors and enterprises very critically, pointing to the management lapses

of the leadership structure, lack of social order, non-result orientc d nature of public

enterprises in Nigeria's development efforts and the conscipicut us defects in the

management of government business in the country. So, the probh m of Nigeria is a

problem of poor and ineffective management of her abundant resourc es, .particularly the i . . '

ineffective management of her myriad of' development projects and pr 3grammes initiated

by subsequent governments and donor agencies over the years ard this affects the

developing countries of the world and therefore requires the developi ig countries of the

world and as well as global attention. Nigeria's effort is still felt he Ice Obitayo (1991

pp.37-41) stated that apart from industrial research

development centers by the Federal Government in

place.

centers, establish rnent of industrial

the second plan (1970-1975) took

2.9 BREAKDOWN OF PROJECTS/PROGRAMME COSTS

Kayode (1979 p.46) stated that the project breakd ,wn covers all aspects of

segments connected with the execution of a project as stated here11 lder respectively:

1. Preliminary Expenditure : . . '

Initial Investi3ations: This covers research and technical : tudies, which cover the

following: nature of the ground, raw materials' analysis, water ava lability and quality and

working out the manufxturing processes.

Under Economic studies, marketing studies, profitability s:udies, design studies,

financial studies and legal studies have to be taken into consideratioc

While treating the site and its preparation, there is the need tc consider cost of land,

Notary's fees, registration duties and fees, drainage and access roads On the construction

proper, one llas to consider the following:- foundations, buildings, v ells, water pipes and

connection to electricity mains, the telephone system, gas suppi, where applicable,

reservoirs and tanks, waste water disposal, fencing, roads and pat is, and housing for

employees.

The equipment and materials cover machines, foundation f o ~ machine, machine

installation costs, testing and start up, prime movers, electricity ar d telephone lines,

electrical equipment, vehicles, office equipment and supplies, furniti re for employees'

houses, maintenance and clearing equipment. The replacement parts cover the cost of a

basic stock of spares, which may be estimated at approximately twenty 1 ercent . . of the total

cost of the equipment and materials, listed under item four. There is nee{' for the provision

of consulting engineers. The incorporeal fixed assets cover patients, l i xnses, goodwill and : . . '

reproduction rights.

The cost of establishment consists of cost of forming the Corn )any, cost of issuing

shares, interim interest, setting up a sales network, advertising, recrl iting personnel and

personnel training in the form of wages and salaries, teaching and trave ing expenses.

There is also need for the provision of contingencies. The wor' ing capital includes

the following stocks of raw materials and requisites, stocks of intermec iate products, stock

of finished products and the average paid for payment allowed to custor lers.

The technical operating expenditures cover purchases, materials, fuels,

maintenance 'materials, workshop supplies, stores supplies, office sup ilies'and packaging

materials. The personnel expenses cover wages and salaries, allowanc :s, and a benefits in

kind, commissions, Directors' fees and'social security commitments. The issue of taxes

and duties cover direct duties and taxes, licensing tax, land taxes, mur icipal and regional

taxes and duties indirect duties and taxes, value added taxes, tax on sen ices rendered, local

tax, turnover tax, registration taxes, duties and fees, registration f :es for deeds and

contracts, stamp duties, customs duties, trade taxes and duties levit d by international

bodies.

The works supplies and external services cover rents, mainte l a d e and repairs,

works by outside firms on contract basis, water, gas, and electricity supplies, fees for

patient, licenses, brand marks, studies find research documents. Trans ~ o r t and Traveling

cover, personal transport, travel and rernoval expenses, freight and trar sport for purposes

and freight and transport for sales.

Under the miscellaneous management expenses, the folk wing are considered:

advertising, oftice supplies, telephone, telex, mails, Iegal document! and litigation, grants

and contributions, cost of consultations and meetings, payment to agents and fees and

finally insurance premiums.

2.10 APPRAISAL TECHNIQUES OF A PROJECT~PROGRAMME

There are so many techniques. used in appraising projects ~ u t these techniques ; . . '

differ in magnitude according to the size of the project. The applaisal of commercial

project is more difficult because interests in the project may cover 11 ore than profit. To

buttress this fact, managers may be more interested in their power, itatus, reputation or

income than in Company profits.

Inspection method is one of the techniques. To achieve t is, two things are

involved. In the first place, the project must require equal investmen1 5 but with different

lives, the yield, equals, net benefit each year, tl~rough the final year of the short lived

projects with the long lived projects earning,

other hand, the project must require the same

further benefit in subseq lent years. On the . . t

investment, the same life span and the same

toral benefit but with some projects earning more in one of the earlie1 years than others,

which is later, compensated for. There is here the additional difieul y of assessing the

relative profitability of more than two projects. Another technique is tl e pay back period

and appears to be the simplest method for assessing the desirability of p wjects in real life.

This method measures the time required to cover the amount invested ir a project and this

might be the reason why many Nigerians select a taxi pro-ject for a star and later put the

funds generated into a house-building project. The pay back period for the taxi project for

example, in Ibadan, is usually less than fifteen months while that of a building project

could run into years. The return on investment is another techn que, which measures

attempts to rectify one of the defects of the payback method in that it considers the

profitability of projects. The measure can take either of the forms. rhe rate of returns or . . .

the annual rate of returns and expresses total earnings as a percentaE3 of capital invested.

A further inroad into the table below will reveal the rates of return; for projects A - F

respectively:

Projects Rate of Returns Relati\ e Attractiveness

Judging the above table, project 'D' is the most attractive project whilr project 'E' is the

least attractive. Projects A and B are equally attractive. The analysis or the con:lusions being but

two of the major weaknesses of this method. The first is that the time value of noney is ignored.

On the other hand, projects A, B and F are assumed to be equally attractiv:. Based on the

inspecti011 method, it was agreed that project B is more attractive than projezt A. Similarly, . . .

project F is more attractive than project B since project F earns N300 more in tht fourth year than

44

e pt-ojccl I3 tvhilsi h e reaso!l for preferring project I3 LO project A is similar to thal for preferring F

and D. T I w c is the subtle difference that the return on F is earned over a shorter period than that

on H, while rlie returns on A arid I3 arc earned over same period.

Gencrdly, the appraisal techniques cover h e market aspect, the technical aspect, the

financial aspcct, thc cconomic aspccl and the management aspcct. Imaga (1991 p. 50) stated that

the escrcise of projecr appraisal ofien begiris with the market analysis because it allo\vs the

opportunity lo revise the projcct idea, if necessary, according to [he size and requirement of the

ma^-kei whcre i r is going 10 SSII. l'hc aspects that need to be covered by thc markc1 appraisal

rcrporls are rhc product and i ~ s applications or uses, the structure and growth of the industry,

currcnL dc t imd , supply balancc, L'uturc demand (projection of demand), future supply, future

de~nand/supply balance, pricing, marketing a i d distribution arrangement and pl'ospecls for the

proposcd unit.

Under the project and its applications/uses, the appraisal techniques, tend to vary from

project to projcct. A large scale projcct mainly dealing in international erivironment for its final

product arid or raw materials necds detailed anaIysis of various aspects especially market,

technical and nianagcrial aspccts. On the othcr hand, a s~nall-scale project rnainly dealing in local

envirorimcnl nzeds nor sperid long time and large rcsources just to appraise thc viability of the

projcct sincc the promoters are aware of local technology to be adopted and management

capabilities to bc required. The project being operated is highly influenced by -the .buyers and

sellcrrs betiaviour-, products offered by the suppliers, thcir prices and quality, political, lcgal and

administrative restrictions.

. . . - 111 a p p i s i n g the currcnl and f u m e prospers of the p r d u c t under pstn.cfurc and growth sf

[lie i ndusq , it is essentid to analyzc thc grwilh trends in ~ c r ~ n s of exi 4 n g capacity, total

ascertaining whether the product has shown consistent growth Iluctuations. The rechnological

d2vclqment as well as changes in govcrnrnent policies in the past also n ~ d s to be analyzed

cspcciaily in the c ; i x af constantly chrrngir~g policies with the change in gmc:rnlneru, as has been

tht: case wirh the change i n governmenl as has k e n the case with Nigeria. In dealing with the

currrent demand, firstly, one has lo b o w ah2 m a 1 aggregate requirement and consumptiun d the

product in order TO rce whet her dasc is marh i Far the envisaged ilrdustry. Pis corkuhpiion is an

indicator of a demand Icvel, the following formula \\ 'ill bc of help thus:

Co is consumption

P is production made during th2 period

I i s imports made during the period

L is esporls ma& during the pcriod

0 s i s opening stock and

Cs is 1 1 . i ~ closing stock

Ttic compilation of stntis~ics using the above fbrrn~~la will provide the fi$urc 'for total

consumption~demand in a givcn pcriad of time, A s t d y c~mpi lar ion of this figure for upwards of

five will show how d;~nancI/cons~~~nptian has been incrmsing or decrea5ing over the pcriod.

1-laving got some idea in respect o f thc s i x of the prcscut marketlamel11 demand, it is then

possible to esti~natc the future demand. The demand projectim thcreforr: tells whether rhc

proposcd ~mit will ha \v enough market or not and what will be its sales v o l ~ ~ n ~ e in thc years so as

10 drtcmine its profi~abiliry. In cslimating fulure demand, the f d b w ng factors will be

considered:

'1'0 identify principal dzlern~inan~s of past demand and their infl lence on i t

To projsc~ the future development ol' the detertni~lilnts: and tlxir influences on

detnand.

I t is good to pinpoint ~ h t . ~echniques rt.commznded for demand foreclsring in Nigcria as . . .

ibllows:

Linear Trend or Trend ,4nalysis: This consists of the Sollowing list...: De~ennining the

trend of' consumption by analyzing past co~~sumption starislics and seconc; projecting fu ru r e

consumplion by esrra polating the trend. Estima~r of capita consurnprim a r d projeclins future

demand bascd on per capita consump~iou and population dynamics inf't-mation of the industry and

I'ossiblc items in-respect of fi~tilre supply can bc obtained from Lie Inland Revenue

Depanment and thc Minisrq or Tmcfe and Industry. This can be vcrificd further through . . . -

discussiom with the Nigerian Tolracco Company WTC] and major physical dis!ribution outleis.

White dcaling w i ~ h furure detnand and supply balar~ce, :I zhomugl~ determina[ion i s

~vhcihcr or not rhc propostd industry will have enough share irt lhc market in [he years to come,

This informarion is also Rdpful to make divcrsificntiofi a~d expansion decision as well as

11 i s Ilowevcr necessaty to have informarion on h e pevniting price str.lcture and the past

trcnds in [he industry both Tor tllc same produce and also far the subs~itutcs. It is also necessary 10

have daia on rhc ~ r d in prices prevailing over the last three or five years riltt.er than on current , . .

p r i c e urdy as price a1 a poin~, il'tinie could bc inllwncecl by temporary factors such 9s shonage in

rhc supply of raw n~a~erials and or input of final p r d u c t which leads to increase in the price

temporarily unless supply is sufficient.

During tk analysis of marketing and dislribution arransenicnts, the xucigl . Pactors . . , t ~ be

s t u d i d arc pricing, distriburion cllannels, cost of distribution, sales promotior and advertising. In

the casc of nun-durable c o n w n e r products kind some other prcducts, qualit:] and packaging am

ELISO equdly important lo s t d y . The issue of sources of informa~ion for riarkct appraisal, the

following is r l c main source of information for part rzppraisnl of inifustrial projects in Nigeria.

P~~climinnry discussion with entrepreneurs, manufacwrers of thc product if any, Nigerian

k!annrac~ure~s' r\ssociarion, and Chanlburs for Cominerce and Industrj, and Esrablisl~ed

I r n p ~ e r s , Impon or Expol't dala kept by the Ministry of' Trade and Industries; Department of

Econoinic Developn~ent and Minis~ry of Finance. Publications or United Ns-ions Agencics such , . I '

as CECI>, FAO, UNCTAD, I ' X , and UNIDO; Research papers and Repom FJ an1 Universities and

other Ir~siiultions of higher lzarning and the department. The Department of Custom and Excise.

Thc ilcxt or second aspwt of appraisal rschniquc is rhr technical a s p x t after the market

aspect '1'0 bc ablc to ascertain the viability of lhc i~ldustry or projccl, the fc llowing aspects are

carefully analyzed in the technical appraisal:

Technology and productio~l proccss

Plant capacily

Machinery and cquip~nent : . . .

hhtesials and hpur

M a n Power

Locatio~l and project site

I3uikfing .and Civil works and

The ~tchrlical appraisal should indicatc which tcch~~olog,y or produ8;tion process to be

selecred and why. Wlile making this dccisian, the follotving aspects nwd to bl: cotsidered:

Possibility OF utilizing indigenous/ilvailable

Raw materials and input

Quality and degree of precision of the pmduct

Stop for diversification of the product

Easy handling, repairing and availability of spare parts

Low operating and ~naintenance

Durability.

'I'k plan( capacity refers lo the volun~e or number of units that can Ix ma~i~factured during a

given pcriod. I-ICE several factors have n bearing on the capacity decision and rhose factors

include market situation or demand.

Raw materiak and inputs availability: In srsmt cases, poor poser supply to operate

rnxh i r~es ol'big capacity may bc a constraint and such ;I constraint should be b ~ r n r : in mine while . . . clloosing the plant capaciiy. Again [here is the need Is evaluate the investment x s t and resources

of thc time.

After the selection t~ lmology and plant capxi ry decision has k e n cor~~pfetcd, it is

essential to make dccision aboul h e right machinery and equipmen1 l o be :c!ccted and swh

szlect~on ctccision has to bc made after carefi~l nssessnrent of rhr: hlfw ing aspects- the capacity

and costs of principal nwhine ry and cquipmcnt, after salts, scrvices m d availilbiliry of spare

parls, Operaling and maintenance costs, Plant scale, compatibilily of cquipment with existing

facilities; Qtrality of mxhincs; Quality and degrce of precision of [he prcsc'uct.

, . 1 he marcrials and inputs should be critically nssesscd in !he technical appl a i d . Thc matcrials and

inputs are no1 only the raw marerials and the mxiliary materials but slsrr utilities such 3s Tvnrcr,

elecrricily and fuel. While doing material and inputs analysis, the fo l lwing aspects should be

considered: . . .

Total requirement of raw malerials and a t r x i h y nlaterials and auxiliar) materials their sources

mi prices. Properties d r a w ~nacerials, total reyuil-enrzn~ of utililies such as watcr, elecrricity and

lird and the possibility of making them available at t l ~ site and if so, at what cost. Arc the present

sou~.ccs sf ~naterials and inputs reliable, possibility of new source 0" matcrials and inputs,

anticipated problcin (if any). Govcrnnwnt pu1icic.s regarding impuris of ri w rnatcriats, chenlicals

and firel.

In thc iechnical appraisal, [there i s the necd to analyze nature, typcs and number sf

rnanpowcr required for r l x aperarion and maintenance of machine and eqr ipment ?vhqher locally

available cx sl~oufd bc impsr~cd . l%ert should be pcovisions for training 6 ' Iota! manpower. l'hc

location of 3 project has ro bc decided very carcfully. I - k c , ivmng Iwilion may give rise ro

difficulty in getting raw materials and inputs, sinking of h&vy machint:~, non availability of

compctenl tcch~~ical pxsonnel. In aizalyzing, care should k takcn in consid.:ring t l r t following:

- Availability of raw nlateriak, auxiliary materials, w a x , electricity, fuel and

labour force at the site.

- Distance of market from the projccl sits

- Dwelopmeni a l infi~srrucrtlrc Faciilirics such a3 roi4d, port and others at 1l1e

s i tc.

- Availabili~y of land for future expansion

- Cost of land in the vicinily

- Prunencss 'lo dis3stcr~ such as ffd, fie incident ant1 w i d . . .

311c Building and civil works aaivilics should be dividud in~o [I r e d i f ke f l r groups ro

:rvoicl: p~rojccl casts and linancial burden. Sitc prcpara~iiw and devclopment. Building and

strucure. Esternal works.

The sitc prepara~ion a d development covers grading a d leveling of thc sitc,

conncc~ion of urilities such as water and elx~ricity from main 1ins.s to the site and other

sire dc3'r=Iopme111 works. I t also covets construction of factory and oftice buildings,

~vor.kshops, store and staff ~velfare; buildings such as moms. Ir clso covers supply and

, diseriburion dutilitks, construction of drainages, fencing, boundary .,valls aild gates.

The pnpmtim of project charts and layouts is neccssarb b.:cause they define the

S C O ~ dtlx project and provide rhc basit; for detailed pprojcct cnginccring and estimation of

i~~vestmer~r and production costs. The i ~ n p n a n i charts and layour drawings a r t briefly

described here u&r sub-hertds:

firla1 products and by-products. I n short, it indisari5 where sfnlctures and go-downs

~jorkshop and othcr services should bc Fi~ncrionally situated so [Rat p~oduction process can

go smoo!t~!y withoul any delay in the flow o r niatcrials and final products. This is to

facilitate lincas ba lk ing .

P h r i hyurrr: This is concerned with the physical I:~.lout o f lhe factory. The : . , .

iriiportant considei-hms in preparing 111e plant layout are:

- Consistency with the production technology

- Slncmh f7ow of p o d s from ow stagc to anocher

- Scope fur expansion

- h4inirnizstion of prduction cost

- Safety of personnel

Conclusively, ~herr: are no gelicrally sgretd formats for technic; I appraisal of projcefs; . . .

rather, the above~rntmlia~ed aspects are just the general principks cf the guide.

Thc rhird aspect d t h e appraisal [whniquc is !he financia[ ~nalysis, whicli goes LO

show whzther or not 3 proiect is fimncially viable or profitabic in ; givefi smi&econonlic

cnvironnwnt. L1dui-2 delving into h i s ropic proper, it will be ideal to firstly explain the

~ourcr.s of ge~ierating ruul~ds, major items of elipcnditure and lhc. fin: ncial plan. Gznerally,

funds for the project are collected rhrough h\,o major sources namely equity and debt. The

equity comprises sftars capital by thc owner(s) 2nd the. public v,hereas !he dcbts are

obtained by borrowing from f i l m c i a \ insti~utions and corn~mrcial banks. Sources could

I ' ,

also c o n x fronl self-sponsorship, ~~nivcrsiiy institutions, fLulc~-al goternmcnt ~nst~ti~rians,

Srarcs, joint Fcderol Governmenr, i n t t~nd agencies, and finally estcrni I agencies.

On the expenditure side, a projccl can be divided into three phases such as firszly

11w p r ~ - i n v e s t n ~ e ~ ~ ! phase, which docs no1 consume much resource. I-Iere cxpendirurc is

&C for conducting fkasibitity ~ u d y , obtaii~ing !i&nses, postage; and expenses. The

sacoixl phasc is knoicn as construction phase and sonsunles a major portiorl uf invcslrnent.

l'hc capital rquircnmlrs during this phasc s a of non-rccuwbg nati re and include cost o n

land, building, civil works, ntachinery and equipncnt .

The third p h e is known as operation phase and generally consun!es a substantial . # .

portion o f capital to run the factory and production activities, The e:.pcnditures during this

phase are recurring i n nature and ~uainly require for purchasing r a ~ v materials and inputs,

paying for utilitizs, administrative an3 maintenance expenses, dqreciation and inrerest

payments. Generally, fund for this phase can bc colIectcd through s lmt - tom loans from

The process of financial analysis initially begins wit!~ th;: calculation of total

projecr cost follo~<ed by the preparaliotl o f projcct incomr: statenxr.t, projected cash flow

and balance s11ct.r statements. The brsakdown point and intcrnal rate of return arc also . . 8

calculated in this proccss.

Escimare of total pruiecl cost The fixed assels investment is made up of the following:

- Land and land development

- Buildingandcivi lworks

- Plant, machincry and equipment

- Furnitire, tisture and office cquipment

- Preloperating cxpenscs '

- Inrcrcsr and other financial chargcs during construc:ion

Under tvorking capital, i t is relevant b make it clear that thr? pre-apccaling

expenses covcr expcrtdi\ure to be madc for conducting reasibility study, obtaining licensc,

initial eqxnses on aclvertiscrnenl, p m a g e and travel. In the same vein, inrcresrs lo &I paid

on long-tern1 loans during construction pcriod are also included in the fixed qssgts.

Afiet asccnaining [he 10t:il projcci cost, 1 1 1 ~ pwjectcd incone sfntmeni knowri as

profit and loss statcmcn[ is prepared. h prcsmts a picture of actu; I financial operation o f

an cntcrprisc over a period of lime. [it gives a bird3 syc view of'11ie tot31 sales costs uf

~oocls sold, operating expenses, and gmsslnet project or loss, depreciation, and tax

liabili~ies. Ir aTsa indicates thc growth and development arcnd af an enterprise in the sense

that one at a g i m x is able to know tflu svrplus amount available cx c istribution as dividend

and or reinvc.stmen~. 'fllc projected income sTatcnlent can be catcirlated with the format

Rcrcunber: . . .

Projected Iucomc Sta temee t

Year of Opcrarion 1 2 3 4 5

Sales (in un i t )

Sales Rcvcnue value

Cost of Snlcs

Direct ~natcrials

Direcr labour

Repair and inainlenance

Depreciation

Gross protXioss 2-3

Opruting Espcnses - total

Indirect Labour

Insurance

Office overheads

Amortization

Opera~ing ProfiL'loss (4-5)

Set Opcmting L. * x p ellses

Inmest on long-term loans

Interest on short-term bans

Pre rax profitlloss (6-7)

Corpor-ale tax

Net profit/loss after tax (8-9)

lia tios

Gross profit/sales in percentages

bet profit'sales in percentages

Nzr profiUtTxed assets in percentages

Return on investment in percentage

I'rojecttd Cash FIuw Stilterner~t

This pr~v ides i n ~ p n a n t itlfor~iutior~ in rcspcct 6f liquidity psi l ion of an

period OF tt depicts whaher or not intcrnaIly generated fiin .Is are sufllcient to meet

obligations, wcsrking capital requirmnc~~t and paymen! s f dividenc s to shareholders. 'lhh

- To determine the amount of casfi nceteclirl to sm-1 the msiness

- To mnke plan for ~irning of a: loan funds and

- 'I'u ensure r h x if projecred cash f l o w Rre met, czsh will .be nvailablc to . . .

mcer payments as they become due.

Forinats for i t are:

13rojcctcd cash llow slakment:

Year 1 2 3 .I 5

Inflow

Sales

Long- term loans

Short-term loans

Total llo\v of cash:

Out tl ow I 2 3 4 5

Fixed asset investment

Materials and inputs

Labour

/Idministration, Salcs and Distribution

Debt servicc

Corporate tax

Dividends

Tax outflaw of cash

Net cash f l o ~ A - B

Opening cash balance

Closing cash balance

I t is necessary to state here that closing cash balance is [he total of net cash balarlce,

which 5210~s liquidity jwsirion of an enLerprise over 3 period of lrirnc

f'rujectcd Balance Shuee

Balanct. sheet projects ahe financial pkture of an entcrpri~c aid this consists of total

assets as well as liabilities. The assets side of the balance sheer s3 o w ally property and

claims owned by an enterprise whereas liabilities side sliows iinar cia1 oiligatibns ro be

discharged by the en[crprise. There are thee t y v s of asscts namely:

- Fixed assets

- Investments/capiraIizdassetsclnd

- Curl-en1 assets

Thc f i x d assets over investment on land, building, ~nxhincry and equipment

wheruas invcstnient assets incl~~de the financial s e c u r i h OW led by thc Company.

Ihe current ass& include cash and b a l k balances, account rcccivable from

cuslarncrs invc~l!ories, advances and &pasits. There are [MU types d4abiIitIes

covered by ehz liabilities side of a balance shect. They are currenl liilbility and

long-tenn liabilily. The current liabiliries irlcludc loans and obligations, which are

1~1;iLitrcJ in one-year pcriod such as bills, payable provision h r tax bonus, dividends : . '

and short-rcrnr loans. Again long-term liabilities i rdude long-term debt

The breakdown analysis is used to indicate a levcl of operation at which a

project yields ncitlicr prufit nor loss, and cspresscd as a ?ercentage of capacity

uliliizalivn in physical units or as a v d u m e of salcs revcnm Analyiicaily, if an

cnierprist: operates a b v u the breakdew level, then there is possibility sf making

money ootherwise not. The l o w r 111e biVeakdown point, the higher the chance for

earning profits and &hc lower the risc of making loss. Cost behauiour of the . . .

concerned opcration ncsds to bc sludict-1 in order to know tht: break even . Icvel of

an L'IIIC~PI-kc. Hcre, costs arc divided into two categories nmely: fixed cost and

The liscul costs remain constant irrcspeciive of chanczs in the vutunle of

outpur. ~iowcvcr, variable costs vary proportionately with 11-2 changes in output

ihus sliowing that it increasds or decreases with the increases In the peoduc~ion.

Drch-wcn point level' (BEP) can be caleulatcd using the following

formula:

In tcrnls of phpicdl unit: OEP -E SP - vc

FC = Total i<'ixed cost

SP = Sellit~g price per unit

VC = Variable cos! per unit

The calculation of BEP involves the following steps

Step I: Estimate m a 1 iixcd cost [FC)

Srep 2: Compute [he varidde cost [VC) per mil on the basis 3f the data 011 capaci~y . , .

in physical tsrnru. Alsa fi11d o u ~ the expected selling s rice per unir (S)

Slep 3: Uivibc 111e total fixed cmts by the difference between a selling price per

unii and variable costs pcr unit to arrive at the BEP in tenus of physical

units.

Stcp 4: Dividc the !?gure-compiixd undcl Step 3 by total inst: lled capxiry defined

i n pllysk81 uni~s ro mive at a BEP cxprcssed as a ,-ate of utilization of

To state example, BEP irt tcr1-17~ OF physical unit, ICL Selling pricz per unit SP = S2 : . .

hrd lised costs FC S30, UOhl

Variable casc per unir (VC] 840.9

BEP as a rate o r utilizing production c q p x i ~ y

27273 x 100 = 54.5% - 'L'his shows I ~ X at a pr.)duclion lend 50000 I

ot' 17173 uni~s, thcre is a urilizntjon of 54.5% of the instdlcd capacity thus showing that

rlu projec~ is expected to nlske ncitlwr pro tit. nor loss.

BE? in terms of sales Revenue:

UEP-SP EC = 230000, J O O N I = 2(27273) ' '

S P - V C 2-0.9 1 . 1

= 54546. l'hercfore Sales revenue at a procii~lioim level of N27273 unit equals 4454546

t hus showing that tllc Company will niakc neltlm profit nor loss.

lntcrnul Rate of Return (1RR)

IL is defined as that rate of biscoun~, which mclkcs the nel prexnt value (NI'V) of a

prvjccr exactly equal to zero, I-rere, a higher discount rate gives increasing lower NPVs.

The discount rate it which [he NPV would be exactly equal to zero i; called Internal Rate

of Return (IRR). . . +

Inves t~nwt decision is taken by cumparing rhe (IRR) of a spcific project with the

actual market sate of interca. The projcct being appraised will be acc:ptcd il' IRR = actual

market rare 01' intersst. I11 rernls of choosing rtn1Qng the allerna~ive projects, tho one with

the highest IRR will bc s e l ~ ~ c d provided this IRR is higher than the actual maiket. rate of'

irrrercst, Thc IRR of' n prc)jtcl has lu be de~urrnined and the sieps o r the calculation arc

prsscnted below:

Swp I : Woik our the ncl cash fiow and calculate the net present valuc. From nhe

N P V calculation, we can idenrib ~ h c minilnun) discount rate.

27273 x 100 = 54.5% - 'L'his shows I ~ X at a pr.)duclion lend 50000 I

ot' 17173 uni~s, thcre is a urilizntjon of 54.5% of the instdlcd capacity thus showing that

rlu projec~ is expected to nlske ncitlwr pro tit. nor loss.

BE? in terms of sales Revenue:

UEP-SP EC = 230000, J O O N I = 2(27273) ' '

S P - V C 2-0.9 1 . 1

= 54546. l'hercfore Sales revenue at a procii~lioim level of N27273 unit equals 4454546

t hus showing that tllc Company will niakc neltlm profit nor loss.

lntcrnul Rate of Return (1RR)

IL is defined as that rate of biscoun~, which mclkcs the nel prexnt value (NI'V) of a

prvjccr exactly equal to zero, I-rere, a higher discount rate gives increasing lower NPVs.

The discount rate it which [he NPV would be exactly equal to zero i; called Internal Rate

of Return (IRR). . . +

Inves t~nwt decision is taken by cumparing rhe (IRR) of a spcific project with the

actual market sate of interca. The projcct being appraised will be acc:ptcd il' IRR = actual

market rare 01' intersst. I11 rernls of choosing rtn1Qng the allerna~ive projects, tho one with

the highest IRR will bc s e l ~ ~ c d provided this IRR is higher than the actual maiket. rate of'

irrrercst, Thc IRR of' n prc)jtcl has lu be de~urrnined and the sieps o r the calculation arc

prsscnted below:

Swp I : Woik our the ncl cash fiow and calculate the net present valuc. From nhe

N P V calculation, we can idenrib ~ h c minilnun) discount rate.

60

Stcp 2 : Usc a higher discount rate than that in rht: NPV calcu ations ta compute the

count.

-ate of discount and

ows until'thc later is

br: close ro zero.

Stcp 5 : Idcnrify the rate of discount iN which lthc present value of' rerurn of a prajcct

and compare i \ v, it11 the actual rnarktr mte of interest. The fc llowing forniuIa may

be used to get [he Internal Rate of R a u r n of a project thus: IR t = i2 + '' ti2 - ill

P V + N V . . .

LIIIC: Inrrmal Rate of Return (IRK)

NV: Negative value of NPV at the highest discount rare in absal~re terms, ihat is, the

ruinus bign neglected.

i I Lows discount rate (at which NPV is positive)

i2 Higher rare aidiscount (a1 which NPV is already negative but close Is zero.

I I I I I FACTOR AT 1 IACT(1R AT FACTOR AT

YEAR

From h e above figure, we have ~a1cuiated NPV 31 12% diseou~lt rat :. ~n'ardei- to know

thc I K l i oS this projcc~, ivr: havc increased d i s m u r ~ ~ n(e 10 14% wker :by wl: are trying, to

makc NPV equal to zero. At this rate, the NPV is still highcr henw a mhcr calculation of

NPV at 15% disconnl rate thus bringing the WPV close ro zero but st.11 higher. Now, we

have tricd 16% discount rate, ~ h i c h givcs ncgat iw NPV, which is i lose to zero. 1 ICI-s

using the formula IN will be arrived at as follo~vs:

=12 + 31200 = 12 4 3.4 .= 15.4 This is the IRK of th.: project. 9170 . .

CASH FLOW DISCOtlHT

Applying financial decision-making purpose, if this IKR (i.e. 15.4%) is higher rhan thc

m u a l nlarkz~ rare of interesr (12%,) thcn [he projcc~ will bc accepta . In this case by

DISCOUNT

comp;rrison, the lRR is l-iighcr rhan the actual market rak of interest (i.e 12%). Therefore,

DISC( Uhl'I' I DISCOUNT

the project will be accepted. 'This analysis is very usefirl while dai~tg appraisal of an

I 1 , . .

invesrlnen~ project ~ h u s shou ing or representing a picture of the fi ancial strength ah thc

pro; CCL.

Economic analysis looks a1 the economic: bcnclits and impact of a project mainly to

s c ~ ~ h e t h c ~ or noi 1112 project will makc any imp-ovornent ir the socioeconomic

cu t~d i~ iun . This is.n~ainly ilnpcntanl to lhc government because thc t evclop~ncnt dsocicr

economic infrrrstrwcrure is its main objective.

In wder to sty the mio-ccmomic knefi[s of a project ge~malTy, thc following

an~lyzes arc donc:

- Analysis of raluc added

- Anafysis sf impact on foreig exchange p i l i o n

- Analbsis of ernploymerit efftct

- Analysis of Environmental implication

The value added analysis shows the ovcrall e i ' f ~ ~ t of a project In the economy and

shows how much contribution has been made by an inveslment proj :ct to the cconomy.

Value added is calculated by reduc~ion of the value of brought in m; teriils aid services

(import4 from r l x gross output/salc-s). \\'hatcver i s Icft is the cc ntribulion of local

resources known as value added.

For A Sino,le Year The Following Formula Can Oe Used

h V A = 0 - (ml t D) whcre

NVA = Nct value added

hZ1 = Importcd ~natcrial, i ~ p u r s 2nd services

)O = Gross 011 tput

I1 - Annual dqmcia~ion for that year

For The Whale Economic Lik OFA Prohct, The Following Formi la Can Be Used:

II n n

NVA

1 =l 0

N V A - net value added gcnemted by a project throughout the economic Life fiom

year o ro 17 . n ot Espc=ctd value of o q u t ofa project gencratcd Jd~roughout its economic

l i fi lkom year o to n

(mi 4 1) Expcctd value of imported materials, input an l services as well as

investment througlmt its e

I ~CTC, LIIC I I ~ L v d w added comprises two major compont tits namely wages and . . .

salarics and social surplus. Wages and salaries express the lead )f employment and the

average wages of he pcopk employmi. On he mher hand, rhc soci 11 surplus expresses the

carning capacity of a p r o j ~ c ~ . 11 con~prises indirecl taxes, dividcn I s insurance, rent, and

royalty. It should be vcry well u n d e r s r d here that the nct value ac deci mVA) is the most

impor~anl indcs of the coniriburion olf a pmjxt lo the nafianal e a nomy. The higher the

NVA, ~ h c bolter- the p r o j ~ ~ t in the smse rhat tRt country wil l get ma: imum socio-uconomi~

b t n d i t in knns of wages and snlariis and social surplirs, I f t vo projects are being

appraised, he p r o j m wirh high value added will tss selcctcd, The xojccr whose N V A k . . .

wry low s110uId no1 be accepted if only one p r o j s t is being apprised or evaluated.

M'i~h regard to ~ h c analysis nt- employment efhct, this shoifs new employment

opportunities c rea rd by a pmjecci's. While campuring [his, t he p r o ccts 'impact on both

skillzd md unskilled Patiour should be taken i ~ i h i f ~ ~ ~ u n t , Also b o ~ I direct and indirect

employmcnt should be considered. . Here, direct employment refers to the new

c m p l o y n ~ n t opportunities duly created rvit!lin the projecc whercas d i r e c t employn~cnt

concerns job opponunitics crcarcd in olhcr iprojccts or secrors 1ink:d wilh the project,

uhich is bcing apprdised. l'he main reason for fRe appraisal is to sce ike level of

crnployment to be crcared by a profil h u s sllowing that the higher the level of employment

the better the projrct. Total employnlent cff ic~ can be measured sing the following

fonnar: . . .

No of New Job Opportunities Capi al invested

Unskilled, skilled ~otal crnploynlcnt N'OOO

Within P r o j m (Direci) - - -

Outside Projec~ (lndirccl) - - -

'I'he mlal cmploymcl~t e f f h can be szen using thc following for ma^:

TEE = where , . .

JOT TEE = Total crnployment effect

TI = Total capital investment

'I'112 ration p r w n r s rl pictur~' of the ~noney ro kx spenl to crea t: employment for one

pcrm1. l i ' tho raric, is high, i t means [hat ~ht. tcch~iology adopted ly the project is capiral

intcrlsive whereas i f the ra~io is low, it means that the l a b u r intensive technology has bee11

adoptcd. In a country like Nigeria, which has labour surplus, em^ hasis should be placed

on labour i n ~ c ~ ~ s ~ v c . technology thus showing that projects, which gc nerate more direct and

ind~rcc~ employment wit11 less investment, sl~ould be promole l to solve i~~crcasirig

unsmploynlent in the country.

, - I be analysis u f ne! foreign excha~lp elfxt shows the asst ssnien; of ' t lk projcc~

c f l k ~ s on the foreign exchange positbri o f the counrry. The a m : smcnt is made in t w ~

sragc.5 narncly: Assessment of the imp& substitutbn emwt o r tlic: p oject. Assessmcnl of

the L3alance ol' P a y ~ n c n ~ (BOP) cl'l'eut d ~ h t projca.

The project efkct on t l x I M a n c e of Payment (BOP) has to be es~imated first

especially in coun[ries whcre [he sliortage of foreign escl~ange is a problem to economic

devclopmenz. Establishmcnt of a suphisticard prolject can increase the foreign exchange

r-quiren~c'nts of a country through increasing imports ol'chcmicals L nd inpucs, machinery

and cquipmcnt, purchase of know-how an$ rechndagy a d payment o 'loyaliy. ' '

Cs!ilmLion ornd foreign exchange effwts oTa project applies he followit~g stcps:

Step 1 : The r x i Soreign exchange Iloiv ol'thr: project is found ra t [hrough dcducring

total inflow of foreign exchange !?om nRc total outflow. Here, there is lhe need to calculate"

nct Eorcign eschangc flows for each year on its consrruction and opera ion and secondly far

its toral economic life. For this ~ L ~ S O R , il i s impcwtmt to compile a stalcment of ul! inflows

and outllows of forcig cxcliungc rcla~ccl fo thc project. Howcver, lhc tohl of the i n h w s

and outtlows for each ).ear nwd not balance. The positive Fort'gn exchange flow will

indica~c [hill the projccl conrributes fo the availnbilily of foreign r xchange in the country

ivhili. a negative flow represcnls rhc amount by svhich rhe cow try's foreign cxchaligc

availability is rcducd to the project. Thc rorrnat Sor esiirna~ing Trreign exchange flow is

Foreion Exchance Inflow

1 . Foreign Equi~y Capital

2 . Loan in Cash

3, Forcign aid or grant

4. Esports of ioods or services

5 . Others

7 . Irnporr of capiul goods, equipment, machine and replacement

8. lrnport of raw materials

9. I I I IPOTIL '~ goocis purc1las~"d in Domeslic markel

10. Salaries payable in Ibreigi exchange

I I . Repayment-of Soruign loans '

12. Royalty, know-how and patwt rights

13. Repatrialion of profit and capital

Nt.1 foreign Exchnngc ( 1 - I I) Positive, Negative

subs~iru~ion ef!'cct measures the cstirnated savings in horcign excl mge. This effecr is

calculared at .the value of ahc quantity of' previously imported itel IS, rvhich will now bc

piuduced by this projccb and supplied ro the danrestic markc!.

Step 3: The cornpu[ed net foreign esclmge effecl ol' pr bjecf includes the ncl

foreign exchange flow computed undcr Step 1 and rhe input ~ubsti~ution eflcc~ computed

Net fol'eign sxchangc llows

'Total IKL Ibrcign exchange effect (Positive +, Negative -)

i r ib noted hcre tha; [he net foreign exchange effect may be ncgative i I the initial years due

10 huge invcs~n~ent on in~ported rnatcrials and i~lpuls, machinery and quipment, obligation

OE' psynjcnt of overseas fees and royalties and the repaylnent of loarm ; (If any). A project

wi~lz nagalive fureig exchange effect throughout its life should I ot be xcepted in a . - .

developing munfry like Nigeria evcn as a public seclor venture.

pollution, +vliich can occur whilc. poduci~ig and lransporting i n p ~ t s such as Toxic'gns and

perrorcurn proclucr. SirniMy ,ralluGon mi& wcur during po luticsn process within a

plant. The operation al'a ptant itsclf may result in air, soil and walx pollution and a rise in

rhc noise Icvcl and in fEgati~e eflects in terms of sewage, solid waste disposal and soil

erosion. As a rcsulr of all ~hcse hazards, the environment slmuld be protected at any cost

and ~hsrzfbrc its imp! icarians should be carcrully asscused, In ma, ~y cases, environn~enta!

pollu~ion can bc controlled using proper.tcchnology and selcefing aF propriate location.

. * .

2.. 1 1 Comparison of Characteristic Feawes of ProiecrlPmwarnmc in Dcv.:lopcd and Devcln~ing Countrirs;

Projecldprogiamrnes have many .characteristics especially aczording to their nature

and classification. Cons~~uc~iona!, ngrkulrural, educational, industr al, commercial, socia1

and 0111cr developrnentnl projects tikc Ilealth have llleir peculiar features. However,

appnrci~lly, alniosr all the projec~s are recognized by rect~rring feegrurt s irrespective of their

backgrounds. All these features or items must have to be prescr t in any worthwhile

venture.

In any project rhat w d ~ its salt, hert must havc e project IM inager who acts as a

nmiers of cost, time, tcchnolog~ and total prduct compidbilily. He went funher to say

that the Managcr was responsible for organizing all activities and rest- urccs of the projwr

in such a way as to achieve the final pmjccr objective. Tile Projecl Mi nager is r e q u i r d to

control and coordime t k overall activities OF the projecr and I ikcs a projcct li-om ~lrc

beginning and works it throtrgh compleiion.

In some cases, though, depending on rhe nature of project, the project Manager,

oursicit. thc acmspwe and construction ii~dustrics, is usually lot assigned complcte

rq.wnsibitily for msourccs. Kathcr hc shares it with the rest sf the ~rganization. Here, the

funcbional managers howevrr, retain their bil'~'~f live au~hority, monitor their staffs'

, . . con~ribuzions lo thc project a n d continut: to n ~ a k c dl majar personwl decisions. Once a

p,?rticular projcc~ is complcr~b, the special organimrion assoc ared wirh i t is also

deeennii~ed. In this nay any Cornmithe set for a panicular proje :L is also disso1vc.d on

cornplztion of that particular p~ject. The prujccl Mrtnrrgtr rcquir :5 icmporary shifts of

rcspon.;ibilitics and reporting relalionship that may dislurb the smr? )tR hnctioning or the

regirlar organi7;lr i~~. It also requircs disciphntd exwutivr eKm. rhe senior rxecurives

must have methods to idcn~ify those und~xtakhgs , corporate or div sional that cannot be

successful~y managed by the regular functimal organization working ,vitA roulinc planning

and conuol i n 4 i d s . Managernetit can at times detarnline whether a g i v h i~ idcr tak ing

possess the 'crilical m a s ' by applying four yardsticks such as :cope, unFmiliari~y,

cornplexi~y and slake as briclly discussd h~reundcr.

In tcnm of scope, Project Managcr can k profirably applied, tlefinablc in terms ~f

single specific and rcsuh and two bigger 111an the organi7ation has p i s iows ly undertaken

successfully. A project musf by defini~ian eml at an sbjcctiiw point in limc. 'This will

sliow tlw date the new planr achieves full prodirction, the date the pa -ent Company takes:

over operating management o f '~he new acquisifiai or the date the n w producr goes on sale

in super markets across thc na~ion.

While discussing ~mfa'amiliarity, Iack of it or lack of precer!ent stta tally leads to

disagreement or uncerrairity as 10 how !lie ~~ndenak ing should tx nanaged. In such a : . 4 .

situit~ion, people at thc lawr managenlcnl lcvels need kc told mots precisely what they

are lo do, whilc senior cnccutives are justifiably troubled by a greatir than usual sense of

uncertainty about rhe realism of initial cost estin~alcs, time colnmitn~er~ts or both.

Under complexity, frqucntly, the G e ~ i s i v c criterion of a prc jtxl is the &gee or

ir1rc.r-dzprndence among tasks. There arc howewr, many comparab e inter dependencies

their peculiar lwations to rhc managcrncnt. Thcre i s the need to knov 111e company's stake

i n the oirtcomc of undmaking. Here failure to cmplcrc: the job on s:hedule or within the ; . . '

budgzr entails serious penalries for rhc Company. I f so, Ihc case for 1:-ojcct management is

stmng. A~ain , failure to meet rime a~xl cosr objectives map serio1;sly disrupt corporate

plans, as tn the case of an equipmenl nianufi~c~urer who was o ~ligcd to abandon a

promising ncw p r d u c t lint when a poorly manager mergcr soaked up earnings that had

bwn carrnarktd 1iK Research and Dcvelop~nent on the new line.

I n n normal project, the main inter-depsndcncies and the mail flow of inro l*ma~io~~

is not venical but tatcml. Up and down information flows is rctlativlly light in a well-run

projccl. Indeed, any attempt to consistently send needed i~~forrnatior from one functional

arca lo ij common aurhoriry and down ro anothtr area rhrough convcr tional cl7nnncls is apt

to cripple the project and wreck the ~irne schedule. Projects are i.lso characterized by

cxcrplio~~alfy strong latcrsl working rclstionship requiring clos:ly related h i v i t y and

dtx~sions by many i i i ividuals in dif'krcnt hnclional Departments.

311c s-evere pennkies of delay oftcn conqxl the projejec Manager to base his

decisions on rclalively few cfata, analyzed in hasrc. I l c c i s i ~ n ~ to s ac r ike time for cog,

cosr for quali~y. qualiry for time are colnmorl ro inost projccls at d the pmjeci managcr

must be abk to make then1 wittioul pmicking. Clearly, thcrefwe, 111: has a spccinl 11cd for

in~elligcnc suppr t .from highcr managerncnf, Lack of awareness, i I-advisd intcnmfion

and prsonal ts him can jeopardize thc projwt's success.

Far a swcessfi~l project, them must tx some cepzain prevail,ng guidelihis chat the

executors must \ law lo adopt. InitiaHy, rnarxyment tnlrst clarify the objectives of the

prcsjtci we l l in advance by firstly defining management inrent in ut dertaking the project

md sccondly OUL lininz the scope of \he pmject rRaL is involved and the approximate

degrec of !heir invotvcmci~r, and thirdly by describin~ thc: end r e s~~ l t s 3f thc project and i ~ s

pcrmanenl cff'ecl~ if any on t l x Company or division.

In defining~he management's inte~~t , questions such as ~ h c foll w i n g oftcn come to

mind: wllal are !lie business rmsans for t h s pi-ojec~? \Vhat is rhe Inan ~gcment's motivc in

undertaking? A clear con~.~?on understanding of thc answcrs to thesc q lestions'isdcsirablc

for three reasons: ficsr, it enables thc Project Manager to capitalize one opportunity to

improve LIX outcornc of the pl.ojcct. Within [he rop management's rt ason, the Manager

will be ablc to \~eiyR 'the om: time cost of the project's start up agcitlst the continuity

advantage of the lower prduc~ion c o s ~ or the compe~ilive edge that r light bc gained by

cnrlicr product inhrnla~ion. Again, a clcai dclinitior~ of inlcnt h c l ~ s avert darnaging

ovcrsigh!~ that would otherwise appear unimporrsnt to hwcr level Aanagers and might not

b: ubviws ru the senior ext5cut6ve. 7'11ird!y, a definition ot'rfx inter t of the project helps to

avoid imbalance of effort at thc middle management I c v d si~ch as pushing desperately Lo

mect a sctlcdulr but missing cost reduction opportunities on the way.

While outlining the scope of tlie projec~, this calls to rninc which organizational

mils of the Colnpany will be involvcd in the project and to what e: tent or degree. Here, . . .

cl'tbrts sl~ould be mad\-- to ascertain which sensitive customer re ationship, private or

governmentnl, the Mamger should cautiously skirt.

In describing the end rcsult, a clear concepl of how some ec uipment will opcrate

when they arc in full production, how a saks arganization w11F actu 1I1y change customer

rela~ioriships and how m j o r staft' activities will be cumdinated rr icr a merger, gives

middle managcrs a ~nuch clear views of what the project \vilf involve ;.nd what is expected

of them.

11s the seco~~d guidelines and for a functio~ial project to sustain i t s worih, there nrust

be a compron~isc betwccil wo q u i l t organization concepts. The basic incihenis in favour

of such cornpromise i~~c lude rhe Followi~lg:

Appoinrrnenr of one experienced Mrrnagcr to run he project fill t h e , organization

ol" [he proj2ct rnanngerncnt function in 'tem~s o r rapnsibilitis, assig ~rnent of a limited

n m b c r or men to tbe po jcc t team, nlaintcnance of hilancc of p river bolween thc

fullctio~~al h t d s and [he project Manage. While taking tlw a b v t x n u n eraled steps, h e r e

is the iendency that some generally acccpred management rules may h a v : to be broken and

some organizatbnal fricrion will almosl incvirably occur. I !owevc r the results in tcrms of

successful projec~ ~011iplc~ion should far outweigh these draii-s backs and difficulties,

The appinrment oP an experir;.n& Manager should be such that showing an

individual whose adlninistrativc abititics and skill in persona relations have been . . .

cocivinci~~gly denionstrared u ~ ~ d c r fire. With regard to project Marager's responsibilities,

lie s11~~11d not delcga~e certain responsibilities such as ~ ~ o n i ~ o r i n g milestone

~co~i.lplish~ncnrs, resolving projccrs rcla~td disputes between Senior Managers or

w a l uating the projec~ performance ai' l u n c h n a l departmen! Manat rers. I-Ie should also

hold aespansibiIi~y of reviewing prcsgrcss againsl scheduk, organizinl for, formulating and

appraisil~g a pttqjecr plan. Monitoring project cosl prfom~ance and in place of the

D q m t n ~ e n r Iicacfs nonnally involved, tmding off time and L'OSL. By 1i.niting the number of

men on he projecl mln , [his problzrn is allcviared and t h t project M: nager's involvement . . .

in inrra-fut~cfional mattmi is. rcduwd. As the P w j d Marlager is ton :erncd wirh changes

while the Dcpann~cnr heads musL efficicndy manage roulinc prmedurt s, thz ~ w o are often

in xtive conflict, which should bc resolved without cotlstant apped 10 1 igher authority.

'I'hc guideline lhree wAicli is the installation of prqicct control :alIs for the use of

10 ensure that mmniitrnen~s are met. Lata; tach Dcparlma~L should bt: askcd to commit . - i~self co an esciniare QT the lime requircd for each of i[s project acl iviks assuming 1h.e

required inFonl7atisn is supplied on time. In installing cost confro!, the filllowing sieps are

~ n k n : Break [he con~prrhensivc cost summary into work packagc: . Sense commitment

rtpcms for 'technical' decision n~akers. Act on early approxi1 late report data and

mI1Ci'lltriltr' 'tajent on major problcrns ard opportunitks'.

Cost co~nn~itrnznts on a project are ma& when engintxing, manufacturing,

n~arhe~ing and other fi11ictiol~a1 personnel make technical decisions to take some kind of

action.

Qua~rrity conrrd .cmip&xs thrcc elen~cnts as fdlows:

DcIining perfomlancc criteria

Esprcssing thc project objective in term ofquality standards and : . -

Monitoring progress toivarbs the% standards.

In spite of the Q ~ V ~ Q U % wide use and apparent fortnidabli nature o f [he Project

n~anagcmmt approach in ma-jw develop~vental feats together wit I its recorded success

since its origin tiom thc naval war cffbrts between 1955 and 1957, the diffusion o f the

project rnanagmcnr approach has brought s rkxing of Lhc core disr iplines and techniclucs

ro mtxr rhz nceds of rhc I ts tangible and shifting project obj~t ivcs and scopes inherent in

the type of mganiznti~nal chal~grs. Such damages conliont develor ment goals in the least

doveloped and devclging countries like Burkina Faso and Nigcrin, . . .

It was perhaps Pellgrinelli and Bownml in (1994) that firs. openly advocated ithe

use of the programme approach os A way of n~anaging the in~xdependencc bclwen

pr~jecis and. thc rcquircrncnb LO !card and respond to changing circumstance associared

wirh slrnregy implcrna~tation and r ~ r ~ i [ o r i ~ l g . 1 % ~ Unitod Nations Dcvclop~ncnt

Prot;nninic: [WDP) appears ta have imbibed the programme zpproach in this recent

trainings on management of I>cvclopmenr progrannles; provid : the inevitable flexibility

r q u i r d by project based ini~iaiive v.~ht.re projects for ihc units o 'work as often the case in

n m l dcvetoj$ng countries eslxcially 'rn thcir public er~rcrprises dcqinated programme.

I'umcr and Spiser (1992) have descrikd h e manageme l t of scarce resources or

rile esrablishmsnt of appropriate inroorma~ion systcms as cltarly core elemcnts of

prc)grsrnrne nunagcment, but [hey rocus attention oil !he t&hnicll and p1:tnning aspects . .

mrhcr than on the ordinary gcnerarivc and organizing aspects.

Archibald (1976) stated [hat the teniicllcy to fears o t sinlilaritics betwecn

pmgrarnrncs and projects are un&rstnndable given thal prisgramm: roles appcar to hsvc

kcy pmgrarnme and project disciplines of definition, planning, monitoring and control, risk

identi!ication and evaluation and of course appfaisal. 'Ille unit im ~Imcntation wi~hin a

programme remains a project, within which are linked sets of pactag :s. The lhree primary

reasons fur h e creation of' il programme corxlcpi are l i ~ e d hewunder a:c~rdiilg!y: . . .

- To cwrdinak distinct projects wing a comnwn r e s o w 1 or skill base

To dcxclcy ~omplctcly new systems, infrasrnlcruns or :zrvice and

The programmes enable a schelnatic rnwlcl of pcsrtfolio, go; I oriented and heart

bear cmtigura~ion swn in Japan Companies. Pot~folio programme; are those, which

enable the grouping of p r o j ~ s , which are relatively independent of m e another but have a

common 1hen.rcc [bus showing that \he existence u f this !helm means th tt the p e ~ k m ~ a n c e

of he pn?jec!s car1 be ilnprovcd upon through coordination and this f mns the common : . .

~clrviccs i l l which case ilfu desired betreti? might bc bc1tc.r re5 urce ulilizarion and

personnel develop~cnt or ~ ~ c l ~ n a l s g y . This is exactly what happel ed in Westcras Samoa

berwen 1987 iwl 1989 in connemion with rhe afforestaciun of the island of Savali as a

maijor dccvelopnient projejecr in rhe SrunlSB strengtkning the ect nomic planning and

rnLtrlcigc.nwnt capabilities of Western Sa~noa. 'The p a t folio pro ;ranme however is

~ o n c c r n d with fhc proccjs o f managing projccfs \ k i t h a view 10 e 'fective \evcragc that

cxisrs in knowledge and skill.

t l cmr: elcmcnt progrrin~mt: rnanagcmznl is tracking progress CHI projects and

tahtng actiorr. Monitoring tht financial spending and resource ut litation is relatively

s~raigl~tforward since t1n.y art: addilive m o s s the projzcts; over time.

For a goa!-orientod programme, [his may k essential feed-lack in dulcr~nining

fume dircctio~~. For a hearrbeal prQgnrnme, this may help to PI oritiie requests for

addirional func~ionality, given the likcly over dcmnrb and s[ rnelimes~~flictinglic~ing

requir~"ments for additional fmctionali~y. Another clemen'l of moi itoring and control

which links with the above on risk management and ca~tml, is 'the I xtent to which thc,

project dcliverables arc creating c o n ~ p i t i w advantage as far RS is warr.~ntcd and foasiblc.

Imaga {XKN& stated that moniroring dcvelopmenr programmes nvolvcd s e t t i ~ ~ g thc

proper envirunmnt for allicularing the dwelrspme~~t pqrarnlnr: jbjcctives, seeking

coopsrarion and accepiance from a17 participahg agciicies and in~rrest groups whose

activities h a w ta k manitom!. T h i s hcludcs sctting systc'ms ; i d .procedures for

inspcciiny and obtaining ccinmitmcnt of alt co~~cer-ncd towards prdeter nincd goals and or

objectives of thc pal?fcular programme or programmes in the cotme of national : . .

d w i ' l o p ~ ~ ~ ~ ' n t .

In modcm canlexr of developnrenl management whcre numbers of projecrs are

designed in the frarne\vork of projecl/pmgrarnrn~' cycle, the f~llowirlg steps in the

monitoring h c m x inwitable:

- Measuring xhievernenl againsl the sot srandarbs

- Reviewing results from time lo timc and idcntifiing dshult standards

- IZtlpb~iing [he status cjuo'and taking UIL. necessary ;.nil appropriate :tctioia to

corrcc! all lapses, deviarians and defaulta from the development objectivcs

tlowsoever r l x pflrtfolid progrmme is mainly concernxl w i h the pmess of

m a ~ ~ a g i n g projects w i ~ h a view to efficient rcwurcc u~ilizrttion and providing the erective

l eveny that exists in knowledg~. and skills, This goes to show thc three prirnary reasons

tor the crcation of a programrnc concepr. They include [he followin::

- To coordinai~d district projects using ~1 common resol rce or skill base.

r 7 - 1 s bcvelop cornp!ercly new systems, inirastructure or ;ervice and

- To enhance existing functionrdily or service delivery.

Irnq,a (1999) stated rhat the least developed coun~ties ; re also thc'caunt~ies

which are least exposed to [he principles and practices of rtlanagernent in spire or good

masun: of teclln~bgy transferred LO them by rhe international dollor agcncies or their

former colonial rnasrcrs. These countries include Yemen, B~trkina Faso, Chad, Guinea

Imaga (2000 p.81) stated that subtleties car only lx d scovered by a continuous

liesling of sensi~ivity towards othe~s, which could be ccntplctely undermined by

applicarisrn of negative burcauc~.atic r u k s and Cbnnats as it obtains ill most Nigerian

systcms, p a ~ i c u h r l y in fhe public scctor or,wizations an8 busi less ventures like NEPA,

NITEL, the Nigcrisn Airrvays, he Nigerian Railways, to rnent~ou but o Tiw. l k ivent

further 10 sap that i r i s a conscipi~uous common knowlecfgc that s aff o r m o s t organizations

in Nigeria lack b a h trust and subt!ziy in the work etavironnwnt :rid thal p w p k who have

n o t d ~ v d o p l a sense of corntnunnl responsibitity ill one setting I c m their general sense of

conmunity and nation n I' ~ sm.

2.12 Sonic Pmiecrv Exccutcd in the Past nntl thcir Comparisons

.lhere were some projects embarked upon by the fortncr Eejt Central S t a e Time

dcvcloprnen t d projects were aimed at making some small-scale industries, roads, rural

clscrr~fica~ion a d other minor undertakings useabk. Somc of tlese projects had joint

venture with foreign firms, . . .

I t will thedbre, bc ideal lo see how fir hcse projects hav: faked, whethcr they

Lvcrc completed, par~ially completed, aincomplewd or abanctonthd and why for the

nbandorlment, i f m y .

Industrim wholly owned by Government

Golden Guinea Breweries Ltd. Clrnuahia Modern Ceramics Ind. Lrd, Umuahia - .----

l Iatcl Przsidenrial Ltd. Enugu - Eastern Nigeria Development Corporation (ENDC) Cashew Ind. Oghe (Near En u p ) - Nigerian '

Construction and Furniture Co. [NCFC) Ltd. Enugu [originally a ioinr venture) kpsi Cola Oottling Project, Otlilsha -- - UII ivcrsal Ins. Company,

Project Total Capital

Production ?Our 1 Sanitary ware f 1.0511-1 and dinner ware

accornrnodat ion Cashew nut f 742,105 production and processing

Building ' and f 100,000 Construction Furniture making and joinery '

Soh Drinks .

Services

year Esrablishet

1963

1964

1953

1 960

1961

1961

70

Remarks

Still functioning

. . . Still funciioning

Still fitnctioning

Not viable or effective (awaiting reactivation)

. . a

Kmne o f Company

Niger steels Company Lld. Emme, Enugu.

Nigegas Limited Emene - Enugu.

Nigcria W a w Planning and Cons~ruction Co. Ltd. Enusu..

Modem Shoe Lnd. Limited, Owerri

Trxtilc Prjt~rcrs of Nig. Lrd. Onitsha

Turners Ashcsron Cemcn~ (Nigeria) Ltd. Ernene Enugu

Ni yGiai ~ e r n c ~ ~ i Company Nkalagu

Project

Sleel rods & strusrurr: framcs

Industrial gasses (osygcn and acrtylcnc)

Development of w a ~ e r resources. r a t i o n . general civil eng. Services - Ankle rubber boots men's leather shars and children's foot wears

Spinning, weaving bleaching, dycing tinidling &,printing

Cotton piwe goods

Ponland Cement

Portland Cemznt

Prrtners

Associates Govt. & Siad Machinc of Italy which Provided technical InnnagemenL Water resources Dev. Tcl Aviv Israel and Govemmmt Govc. and klcssrs A.0 Svcnsk Skolats ~abriken o f Swedcn - Govt. 6; lndia Heat Mills Incorporated of New York Govt. UAC of Nig. & Anglo Dutch African Tcxtile Investigarion Group (ADATUI Turners and Ncws Call Lirnited ol Manchcsler England and Government Govt Conrrnonwenlth Dev. Corporatior and Privatt shareholdrr.

Otfhc Cashew and Soya Beans Processing

With thc seriousness ariachcd t0 thc laudable? s b j m i v e in the 2 gicultural secror and

as a means of increasing fhe 1 ~ ~ 1 u e added 1s primary produce and to plzserve such produce,

bU.745 million would he r;pellc in rhe esrabtishmcnt af a good size i ashew and soybean

processing plant at Oglie u Rwe a large aggrega!e or cashews exists The factory would

process IS,M metric tons of soyabeans a year using the solvent ex racltio~~ method rhus

producing 1 1,850 metric tons of sopbeans meat and 2,700 me l r i~ [on; of raw cashew nuts

by [he TPIiSruncvanc Ronste~~/hcorticaror n~ethocl producing 146 I ietric'forts 'of whole

kcrncls, 1 14 metric tons ol' split and b u ~ , atid 75 melric tons of a wh dc. cashew nuts shell

1'u1'01l export. Wirh other by-producls, this projcd wouM aka contrit i~te to the solulion of

thc licld problem. Neguria~ian with China and Enugu Stare for n ore localions in the

srvenrt.cn local yovermlcnt areas Itas co~nn~nced ,

Undcr h e intcgmtcd oil palm production complex, ~\vo g ant mills ~vou ld be

esrablishcd at a cost oi' M O O nl i t l i6n . . The pujecI v . w l d house ttio giant mills for he

proccssing of raw palm oil in order 10 increase its quality.

111 view of [he growing demand Tor tourism by both Iocal anr foreign risirors and

thc rolc h i s was expected 10 play in b s l t i n g the economy, there is !led to establish and

J ;v~lop rourist ccnrcrs. The N1.5 million provdcd for this xwject was fbr the

development of' lhc Ogula and Nike Lake resons in70 lourist centel; but the question is

how Inany ol'thcm survived today?

Rur.d Elcctrificatiun

Under filis schenw, the Federal Government corninis: ioned M e w s T. Inglzdow

and A s s ~ i a w s LO underlake a study of Rural Elttcrricification n lhe country. Thc repor!,

which Federal Covern~wnt accepted, recom~ncndad the eleccri ication of 30 towns in the

ESSI Central Stare 6f Nigeria.

Up thcn, only !he [owns of Enugu, Aba, Abakaliki, Nsukka, Awka, On-i~sha, . . -

Umuahia, Owcrri, Oji River Stations, Wkalag~i, Emenc, Afam, ,'\rnachara, Un~uopara and

Afo Ugiri wcrr provided with electricity in rhe East Central State.

The high demand for eFccrricity services in the State and tl~c consequent ~hartla!l in

ins~i~utional supply by NEPA was rufkred by the number a.td variety of individual

gencralins sets privntety irrstalld all over the State by household:, institutions and village

unils a1 very high cconomic costs. Since these households and village complexes did not

necessarily form economic units OI contiguws territory Fw NEF 4 acrivities, given that

NEPA mainly concerned itself with projccfs, it cor~vidcred viable i 1 terms o f profitability,

il ,thus &volvd on the State G~vemnient la makc efforls lo mc:t these- hi$h'dcmands

through an i~~stiturional awangement that could no! necessarily sacaifice thc nquiremtnts

ot'economic viabifity, although nor specifically geared to mrrximizini profit.

As a rssull of the cornmitrw"~ 0qoR set up by lh? Stare Gc vernmcnt Lo establish

Rural EIcctn'fication Board, ~ h c C3ua-d would undenake: the elcrtrific :,tion of about scvenry

towns and village complexes in the State within the plan period. The programme involved

NEPA or includd iin the then NEPA plans. Thesc Read~uarters a . residuals from thc

prqmsctd and acluitl aaivit ies of NGPA, were given first priority and would bt' dmplctcd

ivlihin rho first t1i.o years of the plan. The orher forty-nine towns would be elcctri lied only

aftcr thc cornplerio~~ of the priority projccts at which time the Boa d must have k c n gcarcd

to capacity to take up projects with grcarer dispatch and eficicncy . . .

An allocarian of U10 millions was approved for the projecls in ~ h t plan period but the

projzct rvas nor completed as previously earmarked.

East Ccntriil State Road Projects Upgrading Sdected Trunk 'C to T r u ~ ~ l ; 'W Roads

bi~un l inous surfaced road nit11 pavement width of 7.325 ~nclers. The road would opcn

up a rich agricultural area. Thc tola! plmncd inves~mcnt was W 1.6 I liltion now ~~ndertakcn

by rhc Enugu State Government. , , .

2. Achi Inyi Ufunia Road: (13 miles or 24 knls), This would bc to latcrite surfaced

road wirh pavenlent width of 5..486 n~ ( I 864). The road would enhance cvacuahn

of tirnbcx from Mamu river ,basin, The ~ora! planned invcstmt n t was NO.65 million.

3. Nsukkn Enugu z i k c Ere D ~ r S u ~ u hkad: 25 rniles (48 km. ). This would be a

lateritc surkmd road with pi~vetncnt width of 5.456 ( I8 fl . The road links a

divisional hcudquaders with a iown at ths border with the Ber ue Plateau Slate and

as sttch fxilirares in~cr S t m cornmunicaiioii. The total planned invcstmenl was . . .

N1.25 million. Thishas becn embarked upon by the Enugu 9 3 . 2 Government.

4. Ninth Mile Cwner 7 Eke - Oghe - OIa - O m o r - Otmha Roat' 37 miles (51 krns):

l'hc road gives exit to rhc proilfuce of rich agricultuml basin of 010, T h i s would \x

a laterile-surfaccd road with paverncnf width ot 5.846 rnctrcs. ~ f k tQtd panned

invcsimznt was N 1.600 million. Thc road has becn t a m d up to Iwoltu and i s now

undertaken hy tlx Enugu Sfare Government for grading a1 d tarring works.

Pow cr_ - By rhcn, sources didosed h t Oji Rivcr powcr sta .im h'xl been reaclivatcd.

Ir supplied power to Enuyu and Nkalagu cement w o k s on a limited scale. Adcyuate

supply was available nr Aba from he n u i n h h n Gas IJow:r Sta~ion, Supply h n i

Kai~~ji-l-lycko E l e c ~ r i c i ~ y Project was expccrd ru be connectccl in 1971 and this would

provide suficicnt power For industries in Oni~sha a ~ d E n u g ! as well as to Wkalngu

Cerncnt Works. Thc Nmi~tich Grid under construction would cvenluatly lir~k~up all t k

i ~ n p o n a n t [owns in !he Sinre with the Afam and the Kainji Darl Projects. R~is projcci

is yrrk to takc off by thc Federal C h v c s n r n e n ~ .

Coal -

Coat has: b m mined at Enugu sincc 1916 arid for several lecades, was the only

significant comn~ercial fuel praducecf in Nigeria. Known Co. 1 resources extended

from h y i rhiny rnilzs s~uthwcsf of Enugu through the p 'duci ig cml fields ai-ound

k-,nugw ro a half' dozen EII&T devc%spcd coal ficlds lying at inrt wals to the nonh ~f

Enugu as far as 0gboyoga South df Bcnuc River, Known work lble rescrws a m u d

Enugu are esrirnated at 32 million rons. !n ! ! IS& the total ourput of coal from E n u p

Coal mines was 900,000 tons but since tk m a ~ k e l for coal hrrs b c x shrinking mainly

because, as in O ~ ~ I C I ' c o u n f r i e , cud as (1 fuel is gradually being replaced, by diesel oil,

rue\ ail and n:rrurd gas. Nigeria is cagcr to fund export markers fc r her coal. Srudies

have sliown that by carbsnizarion, the cod could be used as nmt'tall irgica1 fuel. Other

by-pBd~~cls tan be obtaincd such as road tar, electrode binder )itch. Crcosole wood

przsemlint uws>lic acid k r plywood inanufactirre and BTX (£3 In zcnc, toluene and

iso~ncrs oT XyIwc) for anli knock con~poncrit in the blerlding o'l'pt trd.

2.13 Sonic Lcssons or; l'rwrarnrne ReTa tcul Dewlopmen t in Selectt d 1,rast Developed;

Countries . .

' ~ 1 1 ~ tlirce least dsvebped countries namely Botswana Cape "erde and Maldives

~ c a l i ~ e d aver:+ annual gro\Hh rates bdwecn 198Q and 1954 well in cxcess of ihe raw

7.2% establishcd by Substantial New Progmrnrnt: of Action {SNt'u P) for the 1980190s

in rhc lcau d c v e l ~ d coun~rics ~ v h i c h indecd is lhc rate rcquireu to double ou~put in

onc dccadc xcording ra United Nations; Conference on Trad,. and Dcvclopn~ent

(UNCI'AD),

Four othcr 'least developed cmnrsics narnely Dlii~tan, Guinea 3issa~1, Uganda and

Y c m m wea-t: only sligl~~ly bclow tlzz scr targer. . . .

The c a m of high growf~ ratcs though merdy r e f k i n g recove ies to former Gross

Domestic Product (GDP) lewls 'rbllowing s c u m setbacks u2re nrtributabk to

subslan~ial inipmucn~ci~rs in the management of rhc National progralnmcs of their

public entc~p-ises (UNCTAD). The Icast dcvelopcd countries, 19 ;6 Rcport p.1 New

Yutk 1987, looking a1 the record in terms of' per capita growth. twenty two kasE

devcioped coimtrics registered absolute declines partly bccause sf high p y u l a t b n of'

growth rate but mainly due ro illeffec~ive rnat~agen~enit of na~~ona! development

p~.og~-anunes consequent upon bad governrnenls during the pcriod ilnder rzvie~v, 1988

to 1938, Dut N i g r i a as a mineral exporting country during th : period did not p r f o r m

creditably mainly due to poor public enterprise management.

A lot criricallg depends on what each onc of hcsc countrie ; can do l o substa~itially

improve their skill on project am! programme spccialists in t h L se coungics cyen more

rlm another f o r m of AIDS and assistn~~ct..

Srill on canlparison, the cl~ar~tcris t ic features of Japanese nanagerncnt h a t flows

rrom three basic dements or lends of Trust, Subtlefy and Intima y are enumerated:

Lifrri~ne ernployrnenr

Seniority based rewards

Non-spccializd career paths

St ron~ emphasis 011 [raining

Emphasis on self-discipline and h a m m y

The "Ring? system of collective dmision-making

"Oniikoshi" managemcnl and gnx~p responsibility Com!~any

Utlions

Organinrional cornrnitmenr to egalitarian rela~ionship and

k r n ~ m l i c participation.

tlolisric concern for thc totality employees' lives and t l m satisfidction and

developments. . .

Synbiaric inter-organizational networks

Organizaliona! evalualion of elhical conduct

In-proccss i~~vcntory managelncnt. All !he above qualities make Japan a nation of

importance in project managemunt as against developing counlricsi like Nigeria,

Guinea-Bissau, Chad, and Yemen wherc the eye service i s the case in the management

of enterprises.

CHAPTER TI-TREK

RESEARCH DESIGN AND METHODOLOC Y

3.1, Nature OfThe Sludy

This study has thr hislorical as well as the dcscriprive re lnf ionsh i~~ of the project being

embarked upon by !lie researcher. The hisrorical aspect calls %r the past, present and

futun: cveilts of ~lrc wearch. In the same vein, rhe dacriptive re!; tes to the co~~ceptual

. , background of rhc prqject.

3.2 Source of Dala

Thc s o ~ ~ r c s s of data rverc mninly drawn from hvo perspccc.ti\ zs namely: primary

data and seco~wlary data. 'I'hcsc two sets of d m uiiliz kd the services of

irxlividua1slpr~f~sionaIs and printed documcnls fmnl 1l1c relate1 1 fields.

3.2ji) Priniaw Data; .

The strucrurcd qu~stionriaires partidly formed the primary data and rverc

dislributed accordingly to the few afl7cials of the NEPA HcacIq~~aii xs,' ErtslL;m Zone.

Apnrl from the d is r r ibu td quesllonnaireu, the researcher interviewed a few highly placed

NEPA officials d~us making use or drawing inkretlce from lhc research lueslions.

3.2jii) Secondarv Data:

The sccorrdary data cumpristd inatcrials or itenis such as ~extk~oks, ncwspr-lpers,

magazines, journals, butlerins, periodicals and press releases. Piecds of infurmation

ga~lxred from the above items were carefully collatcd and ar alyzel

~onclusions.

3 3 I'opla!ion

8 9

d before arrh

The researcher wadcd into kwwinp w h s h r the desired nformalion would come

from the tvhole popularion, which the ,NEPA, Eastern Zone cove s and serves, or from a . . .

strrnpk size of the popula[ior\.

Thz group however, chmcn formed proper rcprescnrative c f the whole population

l?gures Srom rht: locat government arcas already cnurnerated. rhe local government

pop~~fation t ipre were as t'ollsws: Anii~ri 110,375; Udi 185,266; L wgu 157.707; Ezeagu

130,153; [ h g u N o h 170,388; Enugu Saur11 158,198; Enugu Ea:t 209,WG; Oji River

9'9,687; hkanu West I I8,S I I ; lsiuzo 93,975 and Nkanu East 122,959

3.4 1r1rcrvit.w Ourstiofis a i d ~ e t l i o d of auestisnnaire ~onstruction

The researcher n~abe usc of the contents oT !he l i tcnture Revi :w including objects

in designing thz main research qilcstbns and in the construction of the

questionnaires. The areas uhere the questionnaires wcw di .triabuted 10 it! the

NEPA Office included randomly selccted staff from the Dl partmenk such as

Administratimy Marliering, Comp~~rcr, Fina~~cc, Planning md Corsst~uctim,

Engineering and Generation, which proctiices power stations.

3.5 Smples Used and Deterinination of Samplc size or nu~nber dQuestion g&

S/No.

I .

2.

3.

4.

5.

6 .

7 .

A k r obtaining the actual sampled crnpbyees of NFPA according to

Dcpartrncnis, the rcsearcher went into daerrnining the sample six1 using the "Yaro

Dcpartmmts in

NEPA Selected

Adininisrration

Marketing

Engineering

Finance

Cornputcr

Generalion

Planning and

Construction

T O I ~ Population of

Sampled Sraff

Ya~nani's" formula as follows;

11 = N 1 +N (el2 Where

No. Of Sampled Staff or

Employees

12

10

7

10

6

2

3

50

n is the sample s i x being sought for

Percentage

71 24% . . -

20%

14%

20Y0

P

12%

4%

6%

- 100240 , ,

N i s thc ppulalion; size already sarnp!ed randomly and know I as 50 '

I is constant

e is [he m a r g i ~ ~ of mor, which represenled 0.05

While strbsriruting the above d;i[a, wc 1 ~ d ihe computalion as :‘allows:

n = 50

n = 44 sample size (questionnaire)

1'1~ figtire sa. cun~pu~zd above s b w c d the m i l number of cucstionnaire to be

disrributed to rhcsc cmployccs. Sampling rechnique was used in eandomly sefclc~ing

B e rsspandents for this research and that respondents were drawn fmm.tl~c literate

group comprising cenificate holders of first school leavir~g, WASUGCE OIL,

NCEtI-IND and graduates. 'This uas to ensure represenrativc ~ e j s of I he population.

3 -6 M c r h d for thc Allotat ion or Questiannairs to the Dt'partments

In the process of allwaring the qucs~iannrtires to the sampled s .afl ol' NEPA, rhe

rescarchcr applicd " K L I I ~ ~ Y ' formula thus:

A i s esptxtd ddepar!rncn~al en~ployw aallocation each

?4, i s the sample size or h c w m b e r of questltolnnaires (34)

N, is the !oral population of sampled employees (50) fifiy

11, is rhe individual or dcpanmcntally sampled employee po,-iulation (as per Dept.)

Engineering = 44 = 6 , I G = G 5 0

Computer C"'= -- 33x6 = 5.28 . = j 5 0

The investigative questions and k i n g past of the qucstionnailzs, were dis~ributed to the

respondcnrs. These qucalons h d some relationships wilh ihe cxprcssed concepts, opinions, ideas

aid csprknccs and guidcP the rcsearchcr fusthcr in fonning his conclusion InLer.

Items employed in ~ h c . validation excrcisu cnmc from ei[her the pilot survey or the

structurd qucs~ionnaircss. Mcri-, the rescarcIur adopted the pibt sun :y as sample to pretest

sonlethirig. In the same vein, ihe responses from thc questionnaires indic sled the t m i image and

expcriencel; k i n g soug!lt fbr.

3.9 S~atist;cal Method of Data Analvsis

The researcher in the process of dc aclual and pictorial wxmings of his work,

iidtdopieJ jomc modcls and merhods such as mathematical and sta istical mcthods. The

nwlwnatical method sl~owcd the: use of absolute numbers percailtag1.s and cables wh ilc the

statis~ical method dcpicted the usl: of cham or hypothesis if any, niai>lly ts dcpia concepts

and directions i n the process, . . .

Tnrt Nalional Ekctrit Power Authoriry Easte~n %CHI.:, Enugu covers

xhinisrralivcly arcs within Enugu city and beyond, 1 k b.:ncficiaries iincludc

individuals, privale and public undenakings within the r m e . I'hc Local

Government areas, which art: ~ovctrt'cl by t k Eastern zone of NEPA, Enugu,

inc!udc Aninri, Udi, Awgu, Gzcagu, Uji River, Enugu Nodh, EI -~u~u Sourh, Enugu

East, Nkanu West, Nkmu East and Isl-Urn and fhse form the case study of the . . .

In Enugu, being the I-fedquarters of the Eastern Directorate, thcre are three

phases of powcr supply. These phases are rhe New I-Iaven sub-sstation, thc

Thinkers Coo~cr Sub-nation and rhc Kingsway sub-sra~ion. Their operations are on

zonal basis thus supplying as directed by the Dircctor of D.stribution (East) Enupu

and its ern irons with electricity. Besides the present sub-.:tations there are other

sub trdnsrnlssion lirles known as fdcdcrs, which were desig.led to supplement the

cfhrts uf rhc sub-srations.

urban and rural etecvificalion. The Fcbera! Govcrn~ncnt, wh'ch has the exclusive

: , . rcsl>onsibifi!y of eslcnding run1 clectrificarion to all the loc; I gavernnlenl areas,

also gws to extend its services lo places ssl~ere irs csiablishrne~~ts are Iwated wi~hin

the zorw. Thr3 Stare Cioverrknt has also mapped ou. in phases many

Comrnunitics that arc lo benefit in the rural electrificaGrsn schen-le or project.

The National Elcclrie I'owr Authority (NEPA) uses r h t foilowing to

supply in Makordi, all the Slalc capitals are being sewed direerl:~ from lllc Grid at

132 k v . and the supply from the Grid i s m o ~ ~ reliable than dint from the local . . .

diesel sets used pwiously. Howcver, projecis under review are the projects

undertaken by the I'oderal Govemrnem thiough NEPA E a s t m Zone for lhc supply

of eleclricity to the local government hcadquanws and those uxicrtaken by the

Stare Governn~ei~t are for the supply of e l ~ t r i c i ~ y \a the communiri rs in phases.

Ilert, effons h a w bccn ~nadz by the researcl~cr throil ;h NEPA officials to

h d our ihhcihcr lhcse projccis are Iirnctional, obsolcte or ar: yct to function and

whe~her there arc factors rnilitaring against their cffxtivcness.

Limitation of lhe Study

Scveral kcmrs appxmd ta have l i ~ n i ~ c d thc scope of thr res .archer's operalions.

One of [he linlirations was nhc rcszarchcr's inabitity to -scnte some of thc

substations old bcing ablc ru find h I r ptxuliar funcrional are, s. Another was the

difilculty of getring the ofticia ts of NEPA ccrnvinccd of the I xa rcher ' s genuine

intention. The rrason for such difficulty, according 10 one of t ~e oflicials, was the

activities o f thc students of UNEC during [he crisis wllen t ley invaded NEPA

territory and damaged properties. NEPA oflicials atways are rn ndful of this even!.

Hoivevcr, the researcher was able lo go lilrough by convicticn. The researcher

experienced financiaf, rmnsportarion and bureaucratic problerr s in the course of

esploring psibilil ies of pscducing, distribuling and collection of questionnaires,

dala colleclion including population of the local government : -eas whcre NEPA

Eastern zone under study sewes.

CHAPTER FOUR

PRESENTATION ANALAYSIS AND INTERPRETATION t j F DATA

In presenting, analyzing and interprtl'ting the data, thz rescareh1.r made use of the

lbllo\vi~~g,:

: 4 -

I . Oi~enionnaicc; comprising the number distribirrtd, \he number ccmpleted, the number

wncornplaed and I!K percentage of the retunid complerd ones.

2. C4as.x~ of Kesporrdcnts: made u p of First S c h d Leaving Certificate holders,

WASC/CGE or SSS 111 holdcrs, NCE/HND holdcrs, and h e fir t degrec and above

holdsrs.

3. Departments and rhc Number of ~urstionnaire distributed to each I epartnlent and i!ieir

pcrcenragss accordingly.

Distribution and Rcturn of Cornnlcrcd Otmriannnires

* - I he qursrionnairss IVCX accordingly disrributed to ~ l i c rcspo~lc~mts by hand and

irr~er collected from k r n by hand too, In the process oT fi l l ingr the forms or responding

to thc qi~estions raised therein, few were correcrly complckb while t'cw were wrongly

. . co~npletcd or partially damaged as sho~vn I~erei~nder:

Plmi in t ; and

Cnnnrucrion

'TOTAL

SOURCE: field data, 200 1 .

The above r n b k showed that lhiny queslionnaires were correctly co~nplt.ted wl~ile fourreen

were ~r rongly filled. T& correctly completed quesiionnaires reprcsenteb :.ixty-eight percent

(68%) while the ulrongly completed ones represented thiiry-two percent (32%). The correctly . , .

completed questionnaires were reprsen~cd on [he Bar Chan thus: 30 x 360 = 245.5". In the

same way, ihc wrongly completed ants were i s p x n r e d as 44 I fa tlo~vs: key.

245.5 "7, I I Response of corrcctl) compfered ones

liar Chart showing respondents' ac.rion on the

questionnaire filling.

TABLE 4.2. Distributicsn on Educational LevellCadrt of Kesmrwlents on Que Aonnain,

The n i m k r one cadre abovc had the highesl number of questiorirlaires,

0 Injeclion substation

'The Powcr s~atiou sewcs as the Apex. 'fhs NationaF Conmi Centre at Oshogbo,

trnl~smi~tin~ sta~iur~s in rhc counrry. Alniost, all the States of the Fedetation have

rransmiiting sraiions. The bottom level, which i s the

DomcsticlCommc~-cialllndustrial, is the fwd generating slation, which dlects

moncy from all the users. Tl~c only source of fi~nds is sale ot'elec\ric power to t h t

consumers or users.

During h e wearch queslions or pilot survey on some selected staH of NEPA, the

folfowing w e a d ~ a i t c d as !he main problems encountered in the projccr. errccurion:

I . Ciovernnierlt policies, which did not filvoi~r the propos; Is and excculion.

Comtanr change of governmcnrs, especially during tho military era, affccted

ful\-scale imp\emcntatiora project execnrions. Howeve,., it was only the

'fhere was tha difficulky of gctting n p p r ~ v a l fron the government after

propcml had been madc. Qrher pr,oblcn~s includcc : - 1,ack of . up . to datc

experiericc and mining on the part of pxsonnel, lack of innovation in

tcclinology, Tear of rlie Inen an lop, influeiicc of polir !cs, poor remuneration,

neglcct of previous adrninistratian, application of rejectcdiobsoletc

equipmenr, self centerdness, a d Ewouritisrn.

2. TABLE 4. (3) S h o w I n ~ items invotvd in thc ~rqiect e,:ecution in NEPA

In &is area, the researcher was ma& .to understand ~h tt the following were

!he itenis NEPA uses during projcct exccurim:

i>

i i )

i i i )

i v)

v >

vi)

vii)

viii)

, . .

Ilistribution transformers for stepping down

I-'rorecrive devices such as fuses

Underground cnblcs

' ~ r a ~ ~ s f o r r n c r s

Elcc~ric poles, both concrete and woodcn types

Alunlinun~ conductors . .

Insula~ors

Pcrsonncl

ix) Fund and overhead lincs

- - I he diagram bcIow depicts rlicse items.

+ S t ~ . > ~ i n g down

4.2 a ~ e of Departments in the NEPA H c a d ~ i ~ a r ~ e r s

The NEPA Headquarters, Easrm flistricr i s made up of the follr wing departmenrs:

1 , Adrninislri~~ion - for general administrative malters arecting NEPA,

4. Engineering - for civil, electrical and other engineering appliances

5 . Compurcr - for innovation and tech~ology

6. Plannirlg and Cons~ruclion- TOP planning and construction of NEPA

prqj~cts.

7. Gcncration - for produci~lg paver stations cspeciallj that of ATm.

4.(7) Factors Rciponsiblc Tor constant NEP.4 Blackouts

. . . From the inrcrviews, the intervicwer or the rescxrchcr was ~ b l c to undc-rsrand that

thctors ~wponsiblr: were many bur a fcw people ou~sida rhe system might not

undcmand thcnl. Ilawver, he narrared rile fol!oiving as bein,; solcly responsible:

Natural causes such as windstorm, erosion nlennce, and Icrrnit.:~.

Nationc?l grid system lhus giving rise LO poor generation

Trammission problems such as ove~bading, transmitling statiojis

. . . Dis~ribuiion problem with the usc of faulty mblcs for in~~at la t io~ls

Man-made pi-irhlcrns such as ilkg:il connccrion, clictnging of phases, iflegal

esrension of lines rhus causing overloading

Use of slibsianclard materials such ns weak woods instead of suxrior and durable

\\,oobs from Oelra Sme.

4(8) Factors that A S S ~ S I ~ E P . ~ in llrc Proiwt f.:secution

'rlx feserirchct was ablc to understand that NEPA alont- could not undertake any

project itsccurion from its incipient stage to the final smge w i t b t t external assistance from

the following agents: . .

3. Conilnuniiy - wiih NEPA supcwising and advisiup

4. Geologists -for ensuring the viabi!ity of the termin and soil stru :ture

5. Vigilante group- for adeqimte =urity Q ~ N E P R marcrials 10 avc id vnndal isat i~n.

, 4.8 - I ikelv Rencfits Accl-uable to the A&J-whtrc Proiecls i s Sitcd znd the-. NEPA. which

undrrzakcs or executcs rhc Proicct 7-0

'f'he inrewicwee informed the rescamher h r NEPA has incurred bad narnes such as

'NEPA again"; "never c x p r power always"' etc., from rhe general pubric as 5eing ineficient but

benefits from i ts projtxt execurion, it should not have considered i rs worthw lilt ness hence the

follol?'ing benefits: incrcsed urbaniza[ion' and tonurbdcion, large-scali industrialization,

agricultural activities, and rnsdicaf a[\etltiofl. Trying to win zhe confidence of the customers, . . .

checks on the high cost of rnetra; Encourages commcrcializalion of ancillary r.~ateria!s prornores

othcr inl'rasrructunl set-ups and social services.

4 . 9 j t rs~onscs on iclicther thz effects of ~roiect appraisal are felt or nc : . . .

1 yes 14

No I6

30

Source: Field dir\;l, 200 1

l 'hz above [able showed thal generally pmplc have not rc:ttiz,ed the irr pact of project hence

'Yes' response 14, as against ''NO" rresporlse 16, which is grcatcr.

Thai howvcr, might be lhc reason why so many projects were I :ft uncompleted or

ab:~ndoncd. The mnmcy or monies earmni-ked fur some, we= Clivcrtw lo pt'oplels selfish

ends.

CHAPTER FIVE

SUMhfARY OF INDINGS, CONCIAUSIONS AND RECOMMEN IATIONS

Idlowing the viral hcts raised in the litemture review, fact: derived from thc p i h . . .

survey or h e resoarch cpcstions and, facts from the dara, analysis, tile researcher was in a

position to build up the following findings:

-. 1. I liar p r o j c c t / p r o g r a ~ appraisals are not imp rtantly felt in the

developing countries as ~hcy arc realized in the dev.:loped cou~irries Jike

Japan, Isracl and United States of Arnericu.

?? 2. 1 hut in projecv'programme, many iktors are involvt d, Factors such as

prsonml, money, material, equipment and other infiasrrucrural Faciiliities

are pal~ially or wholly cornmitcrd i n I I I Q irnptc~nentati'on ~g,ain,'there is the

essence of time element, which enables the Project Ma~~aget. lo know when

ra complete i t .

Church building progralnmc, projtc~s in-betwen i r sucl as the parsonage;

the k n c i ~ ~ g and stores can k more pn'ofilized rlrnn others.

4. That somc projwtsfprogratnmes in .the developing LY)U~ tries like Migcria

wsre away. The monics earmarked for \hen1 we-e diverted to Fruitless

ventures while some of the money %vns converted o pcrsonal money for

selfish cnds and lo be covered up with non-existing p~ojects.

5 . 'That because of the sl~allow reasons or cum~pk ambutable to projects as

tasks always unammnplished, some pcopk of the dev:loping countries tend

to view projects as wgntive cnds which arc never rn milored, rcvicwed or

reactivated atd are onty seen on the pages dnewspapci.~.

6. 1 Sovcrnmmts, comniuni~ics, contrxrors, dcnor agencies and

multinaiionals assist NEPA in thz project dcvelopmenrs

7. That projects are not only limited .or restricted to a r m of monumental . .

importance as previously enuniem~cd but also !a mas such as roads,

churches, schools, hospitds or health institutions, rnarke~s, financial

insfiiu~i~ns, gcruernrnents, privatt.findividuals : nd households,

communicatior~s, ~ransp~rtatioll induding air and sea, ana managements.

8. That pmjccrs/programmcs to tvorth their salt, rhe'lere is th..: necd for human,

material and financial corn~ni~n~cnrs.

9. Thai developing country like Nizeria has to imbibe tltc cuIture and

rcchniques ol' project develop~nenl as cxernplifieb i~ [he developed

cwntsia. Some of t l x culhms and rechniqucs include dedication,

parriotism, avaidancc or greed, sel~f-ccntrednes~, avarice and cheat; . . .

promotion OF dcrnocratic principles, love of God an.i love of mankind, has

to be the criteria.

10. That professionals ax always very importmi in any project execution.

1 I . That developing counlrics sim~ld !auk inwards; and thc techniques, ethics

and, sther q u d i ~ i e ~ 111al makc the clctrctoped rations to excel in

prc~jcc~fpograrn~ne evaluar ion should be copied and ~pplied constantly in

such venrures [{fib purposes of excellence.

. . . 1 That priajects(programrnt.s ofler nos only development ta the affected areas

but also t.rnploymcnc opportuni~ics of v a ~ i o ~ ~ s dimemior s.

The researcher was able to build or arrive ar cor~~lu~ions mainly Eom

inf~eret~es, deductions and findings already dcaft ~ i t h . The ernpiric: 1 studies as well as

literature rcview added w i g h t towards arriving 31 tlw itndzr listed co iclushns. . .

( i ) Thc developed counrries like China, Auslniia, Babylan, Japan,

Gseal W ritain and C;retct vdwd pmjeckdpmgram~ Ies more than the

dewloping countries st141 as Taiwan, Guinea Bissau, Nigeria,

Burkina Easa, Western Samoa, Uganda, l:otswana, Cape Verde,

Maldivcs and Ymon.

The mearcher cisnctudcd t l u t money, men, material and

nxmagemcnt art wry inlponant in any pro& t. Also important arc

ti~l'w: dernenl, god topogritphica1 background devoid o f ~iatural and

artificial calamities or disasters.

Projecls and programmes are very important i I the development of

any because r k y mark rk beginning and the end of such

projcets, and the time fmie , money invo ved, materials and

equipment. They also encoilragc expertise and 1 rofessionalism.

Constant changes in gwcrnmcnl especially du~ ing the military era

i111yeck.d die dtvclopmcnf w implzmcntation of projects. Here, the

esmple of ahc impact of military life stylc during the third

dcwbpmcnt plan ( 1 975- I9SO) was seriously felt.

RC$L-IS and pragranilnes bring abaur mpid de\clqmenr, to bath

rurd and urban areas. Infrastructural facilities su,:h as roads, water,

clecrrki~y cmf~\unicaliort, tradspf?dliorl and housing are bmught to

b a r . Others ii~lwbe swial serviccs such as edwakma! ins~it.utions,

h d r h insrirutiotls, Einn~lcial institutions, markets, gwcrnment

establishments and private xctors.

I'rojccts ofi'cr employrncnl to b l r indigene: and non-indigenes. I t

also promotes industrial as well as agricult~lral undertakings. This

goes to determine the poplr's standard of liiring, per ~ a p i ~ a income

and =if-su t'ficienky.

Thc rcscarcher concluded ahat t h a t n m n l l y causes hapha~ard work, . incomplete .

jobs. and abandonment of proposal projects, inlproper go iern~neril plicics on

projects i s that the money initially earmarked or s c ~ asidc for such projects is

r~orrnally divcrtd away to individual fund on selfish grounds Again, some of the

projccts arc not properly monitored, reviwed or reactivated ivhile somc are just

sircd by he marl at [lie helm of affairs on goveinment policies inly.

The researcher after his findings md conclusions, ncnt further to recommend as

foIlo\\s for the consumption of 11ic Institi~tion (UNN) and the gencra'i~y:

1 . It would be proper if individuals, households, organizarions, communities, local

governrilent arcas, Slates and countries should embxk on projects/pro$ratnmes Ebr

purposes of bcing meaningrully and economically engaged duvelopmental~ly.

2. With such embarkation, the above-cnumcrared classes of business would be

absorbed into series of skills, innovations, reclinology and speciariza~ion. I t would

thcrcforc be ideal and proper for those not highly in h e system to endear . . .

Measuring a c h i e v ~ m e n ~ against the set standards

lir') Reviewing rcsuits koni time LO time and identifying

default standards

IVJ Reportin!: rlie starus q i~u an..! raking the necessary

jid app-opri~fo xlfion to correct all lapses,

dcvisticms . .

8. Efforts should be made to adopt cvaluativc ~ecliniqucs sf pt$ecrs before, during,

and rtfer such a pioject. The foll0wi11g appraisal tcchniyues sl oiild Be considered:

a. Market aspcct

c . Financial aspeci

d. Ecor~onlic aspect

e. Analysis o t' E n ~ p l o y m e n ~ effect and

f. Analysis or Ncf Foreign Exchangc effect. This involves the engagement of

e x p e m and profcssionatu in this canncction.

5.4 Arcas for Further Studv

Individuals, I~ouseholds, organizathns, corporate bodics institu~ions of higher

learning, rcsrarchers, financial inst i tut ions and other inmckted agencies seeking for

hi-thcr inf&malion in rcspccl of Projcctdprogramn~es shou!d utilize [he W Q ~ C ~ S of

the following: , * .

(ii) United Nations Industrial Dcveloprnenl Organization:. ('UNIDO)

v CARITAS Intmatiunal , Donor agencies and Multinar onal Corporations

2. Federal and Sme Ministries cspecislly Works, Health, Educi tion and Finance.

This ilicludcs ahc Local Governmen t Areas as the third tier.

-7

3 . G u v c r n n m ~ Parastatals, Financial tnsliturions and Inslirutions I l f Higher Learning.

4. Research W i e s and Publications irduding Libraries

5. Non-govcmnientd ~~anizations CiJGOs) and Mi tilnry depots.

6. Ccinstn~aion Companies such as RCC, Julius Berger, and Oomc r.

7. Archives and at11ec munumental instalialbns, and ~nuseulns.

8. Projccrs monitoring and implemcnraticins :it the Government I louse Enugu under

'IDB

. . .

9. Organizations and Cornpanics that make use of the scrvic~.!~ of Project Evaluation . .

Review Technique (PERT) and Critical Parth Movemen: (CPM) in respect of

Project Evaluarion and Monitoring Units. This, ho~vcver, shows that operational

stages of ~l tc projects :ire being undertaken

Adewoye, 0. (1978) "Use your opportunities for stating a small industry and scl~enic" Yi~erian Industrial Directory: 6

Ejiofor, P.O. ( 198 1)"Types of government owned Parastat .iIs8'

Foundaaion of Business Administration

Ejiufor, P. 0. (19911): "Composilion of the pub!ic sector" &n appraisal^ of the Performance of he Public Smor in Niceria between 11180 - 1997

Imaga, E.V.L. (1999): "The nature of Project Management" clperations and Proiecl Managernen\ wirh Feasibility Studies,

Iniaga, E . U L (1 9'99): "Project identification and proposal wri ing"

Operations and Proiect hhnagerncnt with Feasibili~v St dies

Imaga, E.U.L. (17449): "Guidelines for Project Management" I'rqicct Management and Feasibilirv Studies.

Imuga, E.U.L. . (1999): "The Project srr-akgy" Operaricsns and I'roicct Mana~enicnt wirh Feasibility Srudies --

I n l a p , E.U.L. ( 1 999): "Techniques of project appraisal and fensi bility analysis in developing countries with special reference to Nige~ ia" Operation and Project Managenicm with Feasibifity Studies.

Imaga, E.U.L. (1996): "'~echnologicd innovators arld monuments" QErationalisino managcrncnt in Niceria ~hrour~h inclircrlous ci111ure and philosophy.

Iniaga, E.U.L. (11999): Strategic Manning as an ins~rumenr of effi:ctiw managemen1 of Na~ional Devdopnwnt through proper monitoring of development proy-am~~~cs", The Nigerian Jocr~xal of Develobmen~ Studies.

lmuga, E.U.L. (1999): 'Comparing project nlanagelnent of the developed countries with 1hal of the developing countries .?he Niwrian Journal . of Dexlopmcnl Studics

K;ryodc, M.0, ( 1 979): "Project clnssificarion" Am of Projcc, Evaluarion

Kirjodc, M. 0. (1979("Estimating benefits from a p7aiect"ql of Proiect Evafi~atior~

Kayodc, 3 1 . 0 . (1979)"hcation of Projcc~s" Art ofi'roject 1 valustioq

Kayode, M.O. (1971)) "Project Evaluation scope and car cept" A n of' Proiect Evaluatiol~ . . .

Kayotie, M. 0. (1979) "inspection method of project" Art of i roiect Evaluation.

Kayodc, hl. 0. (I9791 "Payback period of project Evalua ion" hfl of Proicct Eva1 ualior!

Kayodc, h.l .0. l, 1979): "'Reiurn on invt'slmont ol'projccl Evali alion" Arts of Project Evaluation

Obitiiyo, K.h.1. (1991) d ' G o ~ e r ~ ~ ~ ~ i ~ ~ ~ ~ policies for promoling sr- la1 l scale enrccfHi.ses and.projects" Bullion C13N Volumc I5 No. 3 .IulrdSeplc rnbet 35-37

Obitayo, KhI. (1991) "Contributions of government and f h i ~ c i a l instiututions to ~ h c imp9ementation of policies on small scale indu ;tries and projects" Bullion CRN Vol. 15 No. 3 JulvlSeprember 37-4 1 . .

U h x u I Ukwu (1971): "lndusrrics wholly owned by Goverimen~" Invcstrnent possibiliries in the East Central Srnrr ofNiacsia. First Ed tion 197 1

Ukwu 1. Ukwu (197 1) "Coal" lnvcstrnent possibilities in the E; s t Central Sratc of Nig,eria by Ministry of Trade. and Industry, First Edition. -m

Ukwu I. Ukwu (E97!3: "Improving 11w Health Research and I4ei lth Policy Linkage in Nigcriu" TRc Nigerian Journal of Development Strrdie ;

Ukwu I. Ukwu (!%?!] "industries eslablishcd as joint vei~tul-es by Governmenr and priva~e investors" Investmeni r~ossibilities i n the East CenrraE Stale Nigeria 197 1 first ali~ion..

Irnaga, E.U.L, (!494] "Background of vojcct dbcvcloprnent/mani gemen!". Theory and hactice of PI-oducticm Manarzeinenr.

. .

Imnga, E.U.L. (1996) "Application of Network Tcchnicl~~e ro scheduling and nlonitoring of pmjccV"' Theow and I'ractice of Prodirction Manngemcnt.

Department of Management Faculty of U usincss 'Administrarion University of Nigeria Enugu C a m p ;.

Dear Sir,

I am a post gradua~c student of ~ht above named educational nstitution, carrying or conducting a raearch on "Appraisal of Prc-jecllPrograrnme Managemint i n the Developing Countries; case study: Nathnal Electric Power huthoriry WEPA) Eleadquar :crs.

I shall be grateful if you will go through the questionndres and read r& the questions raised accordingly,

You are nssurcd ~ h a l ycur response in'rhis regard will go a long \:ay towards making a conclusiorl on thc p~~ojccr on hand.

Please, 1 sincerely assure you that all the answers opinions and other nforrnat'ro!~ jn respect of'lhis m u e r will be highly preserved with absohltc confidentiality it so dcse;vcs.

Tlianks for your anticipated cooperation.

Yours failhfi~lly,

Ozor, Stephen A. Rcscarchcr.

Instruction: Tick inside [lie box 0 where npplicabls.

Personal Data:

Scs (a) I n (b) Female

Age (a) 18-15 (b) 25-35 ( c ) 35-50 (d) 5 I and above

blxital Status: (3) Sin& jh) Mltriitd (c ) Divorced (d) ~Itliers

Educational qualifications {a) FSLC; (b) WhSCIGCE OIL [c) N'EIHND (d) Degrec and above

Salary grade level (3) 0 1-04 (b) 05-06 (c) 07 - 12 (d) 13 and a:)ove.

Annual income (a) Below NSOOO (b)' N5000 - N211000 (c] 20003 - 1ZOQ00 (d) Above N 120000.

L)uration of employnient with preen1 employer (a) below 10 years ( b ) I0 - 20 years ( c ) above 20 years.

What do you kr~ow about projecLlprogr:irnme and its evaluation? (a> ....................................................................................... (11). . . . . . . . . . . . . . . . .. ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. ( c ) .................................................................................... ..

(d). ............................. .. ............................................*.......

I:ro~t~ which WUTCO did you coma ro know about project programme?

(a) People (b) Newspaper (c) RabidR!

(dj S c h d (e) Qrganiza~ion . .

:Ire prr)jc3ctslprogranimes openred in y m r organiration or csmmunity ' (a) Yes ( b ) No.

I I . Slate any one you are familiar with: (a) Road, (b) Electri~ii?cation

(c) S c h ~ i I (d) IleaIth {el any o~hcr, spec1 fy ...............................................................................

12. From your ktlowledge of projccrlprogramme, i s it in which for r~~?

(a) P r o f i ~ oriented (b) Non-prolit oritntccl

13. Are there agenistorganizations that assist NEPA in h e projct r/progrornrne appraisal and execution? (a) Yes (b) ;.lo

15 From your knoivled~e of projce~s as they concern NEPA, are there likely bencfits cfcrivablc from them? (a> Yes No

1 G. 11'Yes as above, state the likely bcncfirs

(a). ....................................................................................

(b). ................................................................................ .-.

17. Using NEPA as example, w l m arc responsible for NEPh blacko~ rs, constanrly, especially 10 where projtxts Itad been esrnblishcd?

(a).. ....................................................................................

(b). .....................................................................................

1 8. In your organization, what are ilic iwms that are used in appraising or evaluaring projecrslprograrnmes?

, . . ................................................................................... {a).

. . (d). .................... .. ......................................................

7'0 ;rile bcsf of YOLIT knowledgcr arc projects in thc dcvcbpin; cout~trics like Nigeria hvourably comparable LO those of the advanced counrries l i t e China, Japan. and Israel etc? (a) Yes (bl No.

From expcr-ience of your organization, arc: !here likely prohlc; 1x5 encoi~ntcred in the implcrnenration of projects? (a) Yes (b) No,

1T8Yes' stale rhc problems encountewtl.

(a). ................................................................................

............. (b) ................ .. ....;... ............................. ........,..

( c ) .................................................................................

Using Nigeria as an example, have there k e n projects ewniar! ed that havc not bccn csccurcd'? {a) Yc9 (b) No.

IF Ycs, what are msponsibie for their no1 k i n g exccutd?

(a). ................................................................ +. .................

( c ) ....................................................................................

in Nigeria, \lave ssm donor agmcies ~f rhc wolld assisicd Nigc -ia in projece execu~mn? (a) Yes (b) hb.

If 'yes' as above, what are 2h2 npxim? , . .

(a) ...................................................................................

(b). ................. .. ............................................................ ( c ) .................................................................. ...... .....*... . After the ngencicu have exec.u;ed the prsjcvts, Rave Nigerians bee I able to sustain them up to date? (a ) Yes fb) No.