COLLEGE OF BUSINESS

MSC IN DEVELOPMENT FINANCE

COURSE TITLE: MFD 008-MONITORING AND EVALUATION

NAME: PETER MUTUI REG.NO: 21/08121

ASSIGNMENT: TERM PAPER

ASSIGNMENT TITLE: DRIVERS OF PROJECT COLLAPSE IN DEVELOPING

COUNTRIES

SUBMISSION DATE: 19TH MARCH 2022

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TABLE OF CONTENTS

1. INTRODUCTION....................................................................................................................2

1.1 Background of the study.......................................................................................................2

1.2 Statement of the Problem......................................................................................................3

1.3 Objectives of the Study.........................................................................................................4

2. LITERATURE REVIEW.........................................................................................................4

2.1 Introduction...........................................................................................................................4

2.2 Causes of projects failure......................................................................................................5

3. METHODOLOGY...................................................................................................................6

3.1 Research Design...................................................................................................................6

3.2 Research Instrument.............................................................................................................7

3.3 Target Population and Sample..............................................................................................7

3.4 Sources of Data.....................................................................................................................7

4. FINDING AND DISCUSSION...............................................................................................7

4.1 Top-Five Causes of Project Failure......................................................................................7

4.2 Results of EFA......................................................................................................................9

5. CONCLUSION AND RECOMMENDATIONS...................................................................11

REFERENCES..............................................................................................................................13

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1. INTRODUCTION

1.1 Background of the study

Majority of developing countries have been witnessing a rise of government-driven investments
in large projects. These projects are mainly intended drive socio-economic development and are
usually funded by governments and development partners for implementation in majority of the
sectors (Ahsan & Gunawan, 2010). These government-led projects are of great importance to the
people of that country as they constitute an integral part of growth and development. Thus,
execution of these projects successfully is a positive gauge that development is taking place in
that country. However, majority of the projects undertaken by government in developing
countries are categorized as failed and collapsed projects (Hanachor, 2012).

There are different definitions of project and project failure. Shafiei & Puttanna (2021) defines a
project as a temporary undertaking that has a certain commencement period and end and
implemented for the purpose of producing certain results through the funding from government
agencies, multilateral international development agencies and non-governmental organizations.
Note (2015) terms a project as a sequence of different but and interrelated activities for the
achievement of a certain goal within set timelines, costs, resources and specifications.

However, there is no precise description of project failure and differences exist as to the
acceptable definition of project failure. According to Amachree & Amachree (1988), project
failure arises when the project cannot be completed within specified timelines, cost and
specifications. Nzekwe et al. (2015) however, is of the view that a failed project is a project that
has failed to fulfill its intended purpose regardless of completion time and cost can as well be
considered as a failed project. In most cases, project failure manifest in various ways such as
cost and time overruns and compromised quality (Belout and Gauvrean, 2004) as well as poor
planning, inadequate cost estimation, inflation, variation of project design and scope and
contractor competences (Nzekweet al., 2015).

The causes of failure of projects are many both in developed and developing countries.
Moreover, studies have shown that governments have lost huge amounts of funds due to failed

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projects (Damoah, 2015). As a result, the collapsed projects have led to stagnation of national
development (Nweze, 2016).

It has also been established that there is high rate of project failure in developing countries than
in developed countries (Damoah, 2015). This failure is attributed to several factors that includes
inefficient planning, cost variation and difficult stakeholders (Rajablu et al., 2015).

In order to address the problem of project failure, various studies have suggested the need for
investigations into the causes and effects of failed projects. (Taherdoost and Keshavarzsalehc,
2016). However, there is limited knowledge as to the specific causes of project failure in
developing countries. Thus, this paper seeks to establish the causes of failed projects in
developing countries and particularly in Africa.

1.2 Statement of the Problem

Despite thousands of projects having been implemented in developing countries in different
sectors of their respective economies, majority of the project have not been able to deliver the
anticipated results. The finding of some studies indicates that the initial goals and outcomes have
not been actualized by implementing these projects. According to Laber (2018), the projects
failed to meet the expectations as they were not implemented in line with technical and
requirement specifications. Thus, the failed projects fail to produce the proposed outcomes as
well as favorably change the lives of people.

Nwachukwu, et al. ((2010) points out there is high rate of failure and abandonment especially in
infrastructure construction projects including even those under construction. This high rate of
failure is degenerating and has negative effects on the growth and development in many
developing economies.

In Nigeria for instance, the problems arising from project failure in prevalent both in public and
private projects (Nzekweet al., 2015). In this country, projects of modest scale take long to be
completed; thus, raising skepticism about the sincerity of government’s capacity and
commitment to complete projects on schedule. Worse more is the fact that there are so many
abandoned government projects for various reasons.

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This necessitates the need to examine the drivers of collapsed projects in developing countries.
Thus, this paper seeks to establish the causes of failed projects in developing countries and
particularly in Africa.

1.3 Objectives of the Study

General Objective

The general objective of this study is to examine the drivers of collapsed projects in developing
countries in Africa.

Specific Objectives

The specific objective of this study is to evaluate the causes of project failure in developing
countries in Africa.

2. LITERATURE REVIEW
2.1 Introduction
A considerable proportion of government projects are done devoid of profit motive and the main
purpose of such undertaking is to spur development in the countries in which they are executed.
These projects are aimed at bringing the anticipated change in the lives of targeted population. It
is worth to note that government projects are distinct from corporate projects in a number of
ways including their definition, aims and objectives, lifecycle, stakeholder involvement, funding,
project sponsors and the host country’s environment. Different stakeholders are involved and
influence project management process both directly and indirectly (Saad, Cicmil & Greenwood,
2002)

Moreover, infrastructure projects are complex and executed in a risky environment (Khang &
Moe, 2008). They are also faced with scarcity of resources (Muriithi & Crawford 2003) such as
human resources and infrastructure environment that is prevalent in most of the developing
countries (Youker,1999). This chapter presents literature on the causes of collapsed projects in
developing countries.

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2.2 Causes of projects failure
The term project failure denotes projects that are ended before completion. This is a traditional
definition which famously referred to as the 'Iron Triangle,’ as it only considers the success or
failure on budget, period, and scope. This definition was supported by El Emam & Koru (2008)
who urged that the success or failure should be assessed on the basis of quality, costs and
schedule indicators.

However, contrasting the conventional definition, recent advances in project management

practices have laid emphasis on post-completion and outcome phases. These contrasting views
arises from the fact various stakeholders are involved with various expectations. Daniel and
Ibrahim (2019) argue that a project is considered to have failed if it fails to meets intended
purpose regardless of the budget and set timelines. Moreover, the success or failure of a project
far exceeds meeting budget allocations, deadlines and performance expectations. Hence, the
success and failure should be assessed based on scope, cost and schedule as well as post-
delivery stage.

The existing literature depicts various factors causing failure of projects. Some of these factors
affecting project failure could be socio-cultural, economic, demographic political, geographical,
environmental and historical (Ika,2012). Other causes of project failure include ineffective
project planning and inappropriate project design and (Eja & Ramegowda, 20120) and
inadequacies in implementing project procedures.

Besides, lack of skilled human resources and low capacity are human linked factors contributing
to the failure of projects in developing countries (Shafiei & Puttanna,2021)). Political
interference and decisions (Eja & Ramegowda, 2020) and low capacity in administration and
insufficient monitoring and evaluation have also been cited as critical factors contributing to the
project failure.

According to Ika (2012), many of the projects in developing countries fail either as a result of
three problem areas or four traps of project failure. The three areas of problem are;
structural(contextual), institutional(sustainability) and managerial (organizational). On the other
side, the four traps of project failure are the lack of capacity in project management, one-fit-all

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solution, accountability for results, cultural traps. Poor project planning, political interference
and partisan politics, corruption, lack of supervision and incompetent leadership and frequent
changes in the scope of the project are some of the underlying factors contributing to failure of
government projects failure in Africa (Eja & Ramegowda, 2020).

Generally, projects face several and severe challenges due to their complexity nature and the
wider setting in which they are executed. The prevailing literature assessing factors responsible
for failure of projects in developing countries differ in their purpose and scope. These factors are,
in essence, conflicting and monotonous. Thus, it becomes difficult to come up with a specific
factor set responsible for project failure in developing countries.

In Kenya for instance, implementation of the three of the country’s megaprojects has been
described as poor (Müller-Mahn, Mkutu & Kioko, 2021). In the case of the 485 KM Standard
Gauge Railway (SGR) project, cases of weak land laws have been cited as enabling elite to
corruptly benefit from the project by forceful eviction of people settled along the project corridor
without sufficient compensation. The land grabbed by the elite is then sold at exorbitant prices at
the expense of the marginalized poor. The planning of the project is said to be poor and was
dominated by the same elite resulting into the financial failure of the project and transferring
debt burden to even future generations through high levels of indebtedness and taxation.

Therefore, this study aims to explore and evaluate the causes leading to project failure in the
context of developing countries.

3. METHODOLOGY
3.1 Research Design
The study sought to examine the causes of project failure in the context of developing countries.
It relied on the qualitative analysis of the previous literature on the causes of project failure. The
extant literature reveals that structured questionnaires have been used before for data collection
from the respondents. Saunders et al., (2016) defines questionnaire as a common instrument that
is used to collect data through which respondents provide answers to the specified questions. The

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questionnaires are used to gather information on respondents’ perceptions and other qualitative
features such as beliefs, opinions and attitudes (Yamin & Sim, 2016).

3.2 Research Instrument

Questionnaires have been used for data collection in examining the causes of project failure. The
causes of project failure that were included in the questionnaire were from literature review on
studies of similar context in developing countries. The Likert scale ranging from Strongly
Disagree to Strongly Agree for each item was used.

3.3 Target Population and Sample

Review of existing literature illustrates questionnaires are designed to allow different categories
of stakeholders to participate in the study. The targeted population for the study is usually
members working in the projects and drawn from a wide array of stakeholders at local, national
and international levels.

3.4 Sources of Data

This study relied on the secondary data. It was used to ascertain the theoretical background as
well as modifying the research questions so as to establish the limitations of the previous studies.
The sources of secondary data were journals articles, online textbooks, conference and workshop
papers, real estate magazines and newspapers.

4. FINDING AND DISCUSSION

Using factor loading matrix for project failure Eja, K. M., & Ramegowda, M. (2020) identified
five most important causes of project failure in Nigeria. These were poor project planning and
implementation, variation in the project scope, inflation of prices for the raw materials, award of
contracts without availability of funds and political pressure.

Similarly, Shafiei & Puttanna (2021) studied the causes of projects failure in Africa and parts
Asia. They identified the following main factors of project failure.

4.1 Top-Five Causes of Project Failure

4.1.1 Insecurity
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 The findings of Shafiei & Puttanna (2021) revealed that insecurity and the existence of armed
conflicts was a major factor causing project failure in parts of Africa and Afghanistan in
Asia. There was an inverse relationship between insecurity and the success of the project.
This was because many of the project workers had been killed by extremist groups, thus
making the project to be abandoned (Williams, 2013).

4.1.2 Corruption

Sopko et al. (2016) observes that corruption threatens the success of projects more than
insecurity in Africa and Asia and especially for state-built infrastructure projects.

Corruption is prevalent in majority of African countries at all levels of government, thus

adversely affecting the ability of developing countries to provide security for the people as
well as providing basic public services (Shafiei & Puttanna, 2021). This high rate of
corruption hinders delivery of humanitarian aid in war-revenged economies, thus making
impossible to have meaningful completion and success of government projects.

4.1.3 Political Interference

Mfuru et al. (2018) observed that politics plays an important role in the construction of
hospitals, roads and schools in most of developing countries. Political interference in
projects arises as a result of political decisions that affect the management and administration
of projects including planning and organizing, fund allocation and staffing. As a result of this
political interference, most of the projects are designed by technocrats’ who are political
appointees. This interference manifests itself in all stages of project management and
especially in the recruitment project management team.

4.1.4 Ineffective Monitoring Procedures

In as much it is requirement to have stringent monitoring of development projects by the

international donors, there still exist development projects that are carried out with no control
and oversight. This lack of strict monitoring cast doubts as to whether the desired outcomes
are being derived from the projects. Thus, poor supervision and ineffective monitoring
procedures can lead to the failure of development projects (Damoah & Kumi, 2018).
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4.1.5 Inappropriate Selection of Project Managers (PMs)

The Project Managers (PMs) are responsible for the management of development projects
and due care should be exercised during recruitment of PMs (Discenza & Forman, 2007).
Most of the development projects are managed by expatriates in developing countries.
However, studies show that project leadership beyond the border is likely to contribute to the
project failure. These expatriates employed to manage international projects face a myriad of
challenges including legal and political setting, adaptation, insecurity language and
communication barriers and cross-border cultural gaps (Freedman & Katz, 2007).

4.2 Results of EFA

In separate study Damoah & Kumi (2018), they explored the factors responsible for failure of
government projects in developing countries. Using the results of Exploratory Factor
Analysis (EFA), they identified the following factors as causes of project failure.

4.2.1 Financial Constraints

Financial constraints are depicted in delayed release of funds, delayed payments, inadequate
funding and cultural and belief systems. Delayed payments to suppliers and contractors
impair project cost and completion time (Akinsiku & Ajayi, 2016). Red-tape procedures
requiring cumbersome paper works contributes to the delays in payment of bills. On the other
hand, delays in the government release of exchequer have negative impact on projects. These
delays are responsible for failure of government projects and inability to alleviate poverty
and promote economic growth in most of African developing countries (Ayoki, 2008).

Insufficient project funding and downsizing of project scope and budget as a result of cost
escalation and lack of adequate funds have resulted into projects failing to yield the desired
outcomes.

4.2.2 Ineffective Recruitment

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 Ineffective recruitment arises from poor recruitment, inappropriate selection of PMs, poor
project team formation, low capacity and weak feasibility studies. Recruiting the right people
for the project ensures quality delivery of the project.

But in developing countries, most of the selection are carried on nepotism basis with most
vacancies being filled with friends, relatives, colleagues, and persons of the same ethnic
group as the organization owners and without any due regard to the knowledge, skills and
experiences (Thamhain & Wilemon, 1987). This ineffective recruitment thus leads to the
failure of development projects.

4.2.3 External Forces

The components of external forces are corruption, insecurity, political interference and
pressure groups. Pressure groups such as tribal leaders, religious groups and ethnically based
groups wields some influence on the management and implementation of development
projects in developing countries. This is because the interest groups are established to attain
specific purposes (Balyer & Tabancali, 2019). They are organized to influence and inform
public policy in their favor.

4.2.4 Project Leadership

Poor project leadership is gauged on the lenses of improper task definition, frequent changes
in project leadership, changes in the scope during project implementation and regulations.
The role of project leadership is of great importance (Westland, 2016). However, most of the
time, proper project leadership is absconded leading to project failure. Poorly managed
projects lead to budget overruns, missed deadlines and even project failure. While variation
in project scope is not a bad thing, the lack of proper control of change is one of the main
hindrances to project success (Millhollan, 2008).

4.2.5 Project Management Practices

The project management practices comprise of inadequate and ineffective monitoring

procedures, weak supervision, lack of commitment to the project and management practices.

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 In developing countries, the failure of projects is attributable to a number of factors which
includes lack of proper monitoring and evaluation. Monitoring and evaluation of projects are
critical in enhancing the performance of projects (Callistus & Clinton, 2016). In the absence
of proper monitoring and evaluation procedures, there are high chances of project failure.
Thus, ensuring presence of effective management practices of project will lead to the success
of projects.

5. CONCLUSION AND RECOMMENDATIONS

This study evaluated the causes of project failure in the developing countries through conducting
qualitative analysis of the past studies in the same area. The findings revealed that insecurity
concerns, high levels of corruption, improper recruitment of project management leadership and
political interference are the main causes of project failure in developing countries.

The other factors leading to failure of development projects as revealed by the results of the EFA
are the financial constraints, external forces, project leadership, ineffective recruitment and
project management practices.

The findings of this paper are important as they will help all project stakeholders, implementing
agencies and project management practitioners in engaging in enhanced project management
practices proactively and mitigate the risks of project failures in developing countries. The
findings will also add insights into the projects management body of knowledge. As such, this
study will enlighten international donors, implementing partners management practitioners and
the host government of developing nations.

In view of the findings of this study, it is recommended that developing countries and their
development partners should ensure there is adequate and reliable security for implementing
agencies and other stakeholders participating in the execution of development projects
throughout the project life span. Additionally, the host government and other stakeholders should
ensure that strict and appropriate mechanisms have been put in place to counter nepotism,
tribalism, favoritism and corruption in project management.

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Furthermore, political interference in project management especially in planning and designing,
implementation and monitoring stages should be maintained at minimal levels. The project
management experts and technocrats should not be interfered while executing their professional
duties in project management and should work independently. Finally, effective and proper
measures should be adhered to during recruitment processes of PMs and other project
management teams. Proper and souled monitoring procedures should be put in place to monitor
and evaluate implementation of projects.

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