FPA & MGT Article Review Final April, 2021

COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MBA PROGRAM
FUNDAMENTAL OF PROJECT ANALYSIS AND

MANAGEMENT (MBA 613)
ARTICLE REVIEW REPORT
ON PROJECT FINANCING, IMPLEMENTATION AND
CONTROL PRACTICE:
A STUDY ON SELECTED BUSINESS ORGANIZATIONS IN
ETHIOPIA.
SUBMITTED TO DR. MENGSTU G.
Prepared By: ID Number
1. Worash Engidaw SGSE/237/12
APRIL 2021
DESSIE, ETHIOPIA
A Review Article [DATE]
A Review of Project Financing, Implementation and Control Practice:

A Study on Selected Business Organizations in Ethiopia.
Prepared by: Worash Engidaw Submitted to: Dr. Mengstu G.
Abstract
The purpose of this review is to review what came in some studies and articles that talk
about the topic Project Financing, Implementation and Control Practice: A Study on
Selected Business Organizations in Ethiopia Journal article published after 2010 in order to
study the project Financing, Implementation and Control Practice that are carried out in
these tasks in various organizations. The review provided an explanation of both tasks,
taking into account what came from the recommendations in those studies. Finally, the
finding of the survey indicated that most projects are financed using either internal sources
or borrowing from banks, most firms use traditional methods to schedule, monitor and
control capital projects. Modern project scheduling and monitoring techniques are Work
Breakdown Structure (WBS), Gantt Chart, PERT, Critical Path Method (CPM) and
Kanban, the most popular controlling techniques in Ethiopia the selected firms include
traditional methods like progress report, Gant Chart and field visit.
Keywords: Resource scheduling, Project success. Capital projects, implementation,

financing, monitoring and control.
Introduction
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.
Project finance may come from a variety of sources. The main sources include equity, debt
and government grants. Financing from these alternative sources have important
implications on project's overall cost, cash flow, ultimate liability and claims to project
incomes and assets.
Capital budgeting involves choosing projects that add value to a company. The capital
budgeting process can involve almost anything including acquiring land or purchasing
fixed assets like a new truck or machinery.
Capital budgeting, which is also called investment appraisal, is the planning process used
to determine whether an organization’s long-term investments, major capital, or
expenditures are worth pursuing.
Capital investments are long-term investments in which the assets involved have useful
lives of multiple years. For example, constructing a new production facility and investing
in machinery and equipment are capital investments. Capital budgeting is a method of
estimating the ﬁnancial viability of a capital investment over the life of the investment.
Email : [email protected] , Wollo university, April 2021 Dessie, Ethiopia 1

Purpose of the article / problem Statement

The statement of the problems indicates the capital investment typically,
✓ Account for large amount of funds of the organization,
✓ have a fundamental effect on the future cash flows of the organization once an
investment decision has been taken,
✓ It is very costly to do so, once the funds have been committed.
Objectives of the study

The main objective of this study is to investigate the financing, implementation and controlling
aspects of capital projects taking evidence from Ethiopia. Specifically, this study is aimed at
answering the following basic questions:
✓ How do firms in Ethiopia finance their capital projects?

✓ What are the problems associated to implementing capital projects in Ethiopia?
✓ Do firms in Ethiopia undertake continuous monitoring and evaluation of capital projects?
Data used and Method of data analysis.
The research design adopted in this study was descriptive in nature. Data were collected
mainly from primary sources. Survey questionnaire were developed and distributed to
sample firms in Addis Ababa, Ethiopia. Stratified random sampling method was used in
selecting the sample firms.
Descriptive statistical tools and tables were used in the analysis and presentation and the
data gathered were processed using Statistical Package for Social Science (SPSS 20) and
MS excel and Descriptive statistical tools and tables were used in the analysis and
presentation.
Valuation about the article

The conclusion of the article is aligned with objective of the study as follow,
✓ How do firms in Ethiopia finance their capital projects? the survey result indicated in
Ethiopia, firms heavily depend on internal source and borrowing from banks to finance capital
project. Tax exemption and provision of some facilities by the government can also be taken
as source of finance This implies that Ethiopian firms have limited menu to finance their
capital project which in turn lead to high cost of financing and the survey result indicates main
sources of financing capital projects in Ethiopia; internal source, borrowing from banks,
industry development fund, and initial public offering.
✓ Problems associated to implementing capital projects in Ethiopia? the survey indicated main
sources of financing capital projects in Ethiopia; internal source, borrowing from banks,
industry development fund, and initial public offering.
✓ Do firms in Ethiopia undertake continuous monitoring and evaluation of capital projects?
The survey indicated that the Ethiopian firms use traditional control tools mainly periodic
report and the use of ICT in capital budgeting is limited.
✓ This study I observe there the findings are highly contributing to the Project
management since the best practices in finance and project management areas, and
works with them to get to the debt, equity, and return of the project, considering it in
the enterprise environment.

Strength & weakness

Strength
✓ The article is well written- concise and grammatically correct.
✓ The title is clear, accurate and unambiguous.
✓ The abstract offers a clear overview of the study including the research problem,
sample, methodology, findings, and recommendations.
✓ The purpose of the study/research problem is clearly identified.
✓ objectives, a research question, or hypothesis is identified very well..
✓ The target population is clearly identified, the sample is selected.
✓ The participants fully informed about the nature of the research.
✓ It is sufficient descriptive information given to allow the reader to conclude that the
author’s interpretations were grounded in the data.
✓ Books, journals, and other media alluded to in the study accurately referred.
Weakness
✓ Of course, the title is well clear, accurate and unambiguous but, at the end of the conclusion
it is very broad the general finding of the research all the problems are happing in Ethiopia
or the result is working equally since, there will be better performance between one state to
the other one unless otherwise the research questioner or the survey cover all over Ethiopian
investment.
✓ Corresponding to the Ethiopian population, firms, the collection of data is very few in order
to concluded 100% Project Financing, Implementation and Control Practice in Ethiopia.

Findings , recommendation, conclusions,

The survey result indicated,
✓ The main sources of financing capital projects in Ethiopia; like internal source,
borrowing from banks, industry development fund,
✓ Initial public offering. capital investments are implemented by the firm itself or
both the firm and external contractor,
✓ Most of the firms, managers at different level are responsible for monitoring and control
of investment projects.
✓ Today’s business environment is dominated by rapid and continuous change, which
has resulted in reshaping organizational approaches in order to enhance their
performances therefore, Journal review are very important in order to achieve the
organizational objectives by identifying the gaps hence, the Project Financing,
Implementation and Control Practice: A Study on Selected Business Organizations
in Ethiopia has important role for our course fundamental of project analysis and
management.

References:
Deresse Mersha Lakew (2017) Project Financing, Implementation and Control Practice: A
Study on Selected Business Organizations in Ethiopia.
Olga V. Luskatova, Marina V. Roberts (2019) the Use of Project Financing Factory at
Implementation of Infrastructure Projects in Russia
Retrieved from,
https://en.wikipedia.org/wiki/Project_finance retrieved on April 07,2021.
https://www.semanticscholar.org/paper/Project-Financing%2C-Implementation-and-
Control-A-on retrieved on April 07,2021.
https://journalofbusiness.org/index.php/GJMBR/article/view/2225/2127 retrieved on April
12,2021.
https://www.unescap.org/ttdw/ppp/ppp_primer/41_sources_of_project_finance.html
retrieved on April 12,2021.
https://www.projectmanager.com/blog/project-management-techniques-for-every-pm
retrieved on April 07,2021.

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COLLEGE OF BUSINESS AND ECONOMICS

FUNDAMENTAL OF PROJECT ANALYSIS AND

SUBMITTED TO DR. MENGSTU G.

Prepared By: ID Number

1. Worash Engidaw SGSE/237/12

A Review of Project Financing, Implementation and Control Practice:

Keywords: Resource scheduling, Project success. Capital projects, implementation,

Email : [email protected] , Wollo university, April 2021 Dessie, Ethiopia 1

Purpose of the article / problem Statement

Objectives of the study

✓ How do firms in Ethiopia finance their capital projects?

Data used and Method of data analysis.

Valuation about the article

Email : [email protected] , Wollo university, April 2021 Dessie, Ethiopia 2

Strength & weakness

Email : [email protected] , Wollo university, April 2021 Dessie, Ethiopia 3

Findings , recommendation, conclusions,

Email : [email protected] , Wollo university, April 2021 Dessie, Ethiopia 4

Email : [email protected] , Wollo university, April 2021 Dessie, Ethiopia 5

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