Project Financing, Implementation and Control Practice: A Study on Selected Business Organizations in Ethiopia

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Deresse Mersha Lakew
Deresse Mersha Lakew
1 Jimma University

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Once a project is selected after going through rigorous appraisal process, promoters must also decide the way in which the capital projects will be financed. Project delay is common problem especially in developing countries like Ethiopia mainly because of problems in the implementation and control. The main objective of this study is to examine how capital projects in Ethiopia are financed, implemented and monitored. To achieve this objective, primary data was collected using self administered questionnaire from 109 large private and public owned business organizations found in Addis Ababa, Ethiopia. The finding of the survey indicated that most projects are financed using either internal sources or borrowing from banks. The use of stock and bond to finance capital projects is very much limited because of absence of capital market. Further, the main reason for project delay includes lack of foreign exchange and not properly making project design at the beginning. Most firms use traditional methods to schedule, monitor and control capital projects. Modern project scheduling and monitoring techniques such as CPM and PERT are rarely used in Ethiopian firms.

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No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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Not applicable for this article.

Deresse Mersha Lakew. 2017. \u201cProject Financing, Implementation and Control Practice: A Study on Selected Business Organizations in Ethiopia\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 17 (GJMBR Volume 17 Issue C1): .

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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-C Classification: JEL Code: D92
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April 15, 2017

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English

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Once a project is selected after going through rigorous appraisal process, promoters must also decide the way in which the capital projects will be financed. Project delay is common problem especially in developing countries like Ethiopia mainly because of problems in the implementation and control. The main objective of this study is to examine how capital projects in Ethiopia are financed, implemented and monitored. To achieve this objective, primary data was collected using self administered questionnaire from 109 large private and public owned business organizations found in Addis Ababa, Ethiopia. The finding of the survey indicated that most projects are financed using either internal sources or borrowing from banks. The use of stock and bond to finance capital projects is very much limited because of absence of capital market. Further, the main reason for project delay includes lack of foreign exchange and not properly making project design at the beginning. Most firms use traditional methods to schedule, monitor and control capital projects. Modern project scheduling and monitoring techniques such as CPM and PERT are rarely used in Ethiopian firms.

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Project Financing, Implementation and Control Practice: A Study on Selected Business Organizations in Ethiopia

Deresse Mersha Lakew
Deresse Mersha Lakew Jimma University

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