Some neglected issues in the economic analysis of agricultural project management in Ghana
Date
1978
Authors
Addo, Seth Kenneth Lartey
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Abstract
The Agricultural Development Bank (ADB) is an important
financial organisation and is the main source of credit for agricultural
projects in Ghana. The purpose of this study is to examine the procedures
and method of analysis in project planning and management
adopted by the ADB with the main object of identifying some of the
neglected issues and to suggest some methods for improvement.
Agricultural project planning and management by the ADB
have been found to be plagued by a number of problems and inefficiencies
in the areas of identification and selection, formulation, approval,
implementation, supervision, monitoring and control. These areas are
systematically examined and the main problems and bottlenecks are
identified.
An examination of the current state of project appraisal
methodology is undertaken. The main project appraisal procedures
are also reviewed, bringing out the difficulties of economic costbenefit
analysis and offering a critique of the appraisal procedures.
Suggestions for improving project identification and
selection, formulation, implementation and supervision in the ADB are
made based on the writer's insights into and experiences of the various
problems identified with the production process. Cues are also taken
from recommendations made for developing countries by such organisations
as the FAO, IBRD and USAID. The major contribution of the study is the use of
probability appraisal to analyse risk in a maize and pineapple project
financed by the ADB. The Monte Carlo Simulation technique is
adapted for use in this analysis. Results from this technique are
compared with original results of the same projects obtained by the
use of conventional cost-benefit analysis where single value estimations
of costs and prices are made.
Results from the probability analysis indicate that the
methodology enables us to provide management with more appropriate
information for making the right decisions by recognising the variability
of outcomes of projects in the face of risk and uncertainty.
Mean values of three indicators of worthiness obtained under this
technique arc also thought to be more reliable and acceptable,
especially since we do not have to fear any large variations around
these values.
Limitations of the analysis and directions for future
research are indicated.
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