Wollega University

School of Graduate
Studies
Business Administration
Project Planning and
Management (MBA 542)

@ Admassu T 02/14/2024 1
 I.PROJECT PLANNING vs NATIONAL
PLANNING
 What is a project?
 Project is a scheme or part of a scheme for
investing scarce resources, which can be reasonably
evaluated and analyzed as an independent unit.
 Project refers to an investment activity in which
scarce resources are committed within a given time
framework, to create assets over an extended time
in expectations of benefits which exceeds the
committed resources.
 A project is a complex set of economic activities in
which we commit scarce resources in expectation of
benefits that exceed the value of these resources.
@ Admassu T 02/14/2024 2
PROJECT PLANNING vs NATIONAL PLANNING..
 From these definitions, it is clear that a
project:
◦ has specific objective (private or public);
◦ involves set of activities (planning, financing,
implementing and evaluating);
◦ involves resource use;
◦ deals with future expectations (risk and
uncertainty);
◦ involves comparing benefits and costs to occur in
the future; and
◦ has defined period of life;

@ Admassu T 02/14/2024 3
National planning, Program and
Project planning
 More dynamic and comprehensive definition
of a project, links development planning,
development programs, and project planning
together.
1. A project is an instrument of
change.
2. A project is beneficiary - oriented
(responds to people’s needs).

@ Admassu T 02/14/2024 4
National planning, Program and Project
planning…
Development Goal (Objectives)

Development Strategy

Development Plan

Economic sectors

Service Industry Agriculture

Large Scale Small Scale

Project A Project B Project C

@ Admassu T 02/14/2024 5
National planning, Program and
Project planning…
 Development goal (objectives)
A statement of intention or aspiration of a
government to improve the living conditions of its
people – Example, Growth, Equity in income
distribution,
 It is a comprehensive statement, which guides
development.
It determines the environment or framework within
which development is expected to take place.
 it is vision statement of a society as articulated by
a government

@ Admassu T 02/14/2024 6
National planning, Program and
Project planning…
 Development strategy
 A general method of achieving specific objectives,
It describes the essential resources which will be
committed to achieve the objectives stated,
It also explains how these resources will be
organized, for example, how the labor force can be
utilized,
It can take different forms such as import
substitute, export promotion, Agricultural
Development Led Industrialization (ADLI), etc.
Setting priorities – which sub sector, should be
provided more attention in each sector?

@ Admassu T 02/14/2024 7
National planning, Program and
Project planning…
 Development plan
 Plans are designed as a means to accomplish
development strategies.
 The specific objective can be achieved through
various means (fiscal policies, monetary policy, and
development projects).
 Project can, therefore, be seen as policy
instruments through which national and sub-
national plans are translated in to action.
 Identify priority areas and set a specific objective,
which are directly linked with the overall national
goal (objective).
@ Admassu T 02/14/2024 8
National planning, Program and
Project planning…
 National plans and project plans
It is within the national plans and the policy
statement of the government that all effects of
projects i.e. its requirements, costs and benefits
can be assessed properly.
Project selection and formulation is meaningful
only when consistently placed within the broader
development plans and policy statement.
The more elaborated the development plans, the
easier the work of project planning,

@ Admassu T 02/14/2024 9
National planning, Program and
Project planning…
 The development plans and policy statement have to
specify at least the following points:
1. The desired socio-economic pattern of
development, and
2. Major objectives of development to be pursued,
which could be:
 Self-sustaining growth;
 promotion of employment;
 elimination of absolute poverty;
 improvement in income distribution ;
 economic stability ;
 Independence in respects of critical materials, products etc.

@ Admassu T 02/14/2024 10
National planning, Program and
Project planning…
Programs and projects
Bases of comparisons Program Project
Scope/objectivities wide /diverse Narrower/limit
Location diffused /wide Specific
Lifetime Non-time bound Time bound
Resources Larger budget Limited budget

@ Admassu T 02/14/2024 11
Why projects are undertaken

 Projects are very powerful and efficient

means to achieve development (growth),
 called ‘cutting edge’ of development.
But, projects are not panacea.
 projects are mechanisms for improving
income distribution (as government policy
instrument).

@ Admassu T 02/14/2024 12
Projects as policy instruments
 Projects are policy instruments through which
national and sectoral plans are translated into
action.
Project as capital Expenditure decision
 Long-term effects.

 Current capital expenditure decisions provide the

framework for future activities.
 Irreversibility.
 wrong capital investment decision can not be reversed
without incurring a substantial loss.
 Substantial outlay.
 Capital expenditures usually involve substantial outlays.

@ Admassu T 02/14/2024 13
THE END OF CHAPTER ONE

@ Admassu T 02/14/2024 14