Large public investment projects have become the preferred delivery model for goods and services across a range of sectors in Ethiopia, including road and railway, water and energy, industrial processing plants, and urban regeneration. The government believes projects that have been implemented over the last 20 years have been successful, and it aims to implement more in future.
There is also widespread understanding that the country has shown significant advances in the development of large public investment projects. However, despite growing respect for the current infrastructure advancement in the country, the sustainability of the positive effects of these projects has sparked debate and attracted criticism.
Ethiopia has certainly made great effort to implement this range of public investment projects. The government’s commitment should be acknowledged in this respect because such large projects pose challenges to all involved due to their size, risks, complexity, costs and their real benefits. This is even more salient in the public sector due to the related politics, limited resources and number of stakeholders involved in the process – in short, public projects can often lead to controversy.
But the government should also be aware that even though large projects, if successful, have a significant effect on the societies in which they are implemented, and can boost long-term economic output, they are also problematic if they fail. Massive amounts of public money can evaporate in a single project.
In my recent investigation of the front-end governance of projects in Ethiopia, I found a culture of overlooking project-related risks, exaggerating project benefits, excessive excitement with the immediate outputs of projects, optimism bias (the tendency of individuals to expect positive outcomes from their actions), and limited use of formal and stringent project-governance system. These are major pitfalls related to the preparation and decision-making processes of large projects. If the goal of major projects is to generate lasting results for the public, solutions must be actively sought for such problems rather than trying to shield them from critics.
Even though several encouraging developments have been noted regarding large projects in Ethiopia, they cannot be completely successful without an effective project governance system in place. This represents the missing link between government development policy and projects, and demands change in the political culture in relation to projects. The question of how to improve the political culture remains, but the following points can be recommended in order to improve the effectiveness of project governance system in Ethiopia.
Developing better oversight of project initiatives (monitoring), and the ability to conjugate future needs in an informed and coherent way enables valuable projects to be intelligently inserted into the country’s fabric and linked with other prime streams of development. Hiring independent consultants or seasoned professionals to evaluate the information provided by project initiators (ministry offices or agencies), and letting them state independently what is right can help decision makers to make better choices.
Such independent reviews can be organised as a gateway process wherein project initiatives are reviewed at key decision points in their lifecycle, where such independent peer reviews are intended to provide a suitable level of assurance that the projects can progress successfully to the next stage. The final decision (go/no go) depends on politicians, but involving independent consultants or professionals in planning and cost estimation helps to correct optimism bias and strategic misrepresentation.
Projects have their own lifecycle and should be realised at an appropriate pace. When an agenda drives the schedule or when there is pressure to start and move a project along quickly, corners get cut and opportunities will have a field day. It is very important to note that large projects do not come ready-to-go right out of the box from either a technical or business perspective.
Proper extensive analysis should precede a search for opportunities that fit with the comprehensive vision, and adequate time should be allocated to define the project. In Ethiopia, due to the ‘urgency for development’ and the tendency to avoid spending much money up front, there is a trend of jumping quickly from the idea stage to the action stage without defining projects to the required level and planning for their effective execution.
The prime purpose of a project should be to provide user and economic benefits through the improved system, rather than completion of the physical project serving as an end in itself. Therefore, enough time and money should be allocated at the front-end to facilitate suitable political choices regarding large projects, and to prepare projects before starting the implementation process.
Verifiable and achievable project objectives are necessary to define the project scope and alternatives. Well formulated and measurable project objectives are prerequisites to preparing good decision bases and creating common understanding regarding the rationale for project completion.
Ultimately, the question of why the initiative is important should be posed. Any project initiative needs to have objectives in clear terms, and should be aligned with the government’s development policy. These objectives should be used as bases for evaluating the project’s success. This implies that project objectives should not be exaggerated; they should be real, achievable and evaluable.
Unfortunately, the current practice in Ethiopia has shortfalls. Objectives of some large projects are overly ambitious and beyond the projects’ reach – including overestimating benefits and underestimating project costs.
Systematic project evaluation is necessary to follow-up both the results (outputs) and the effects (outcomes) of public projects and to build necessary references for learning. Lessons from the evaluation should be used as an input for future projects.
It can also help to shape institutions in the regulatory context. In Ethiopia, project assessment is conducted at the highest political level, but not to an acceptable standard from a technical or economic perspective. Conducting genuine evaluations of projects that have been implemented in the last 20 years could have important lessons that could save billions of dollars in future projects, protect citizens’ trust in democracy and the rule of law, and avoid the destruction of spatial and environmental assets.
The project planning process should not be conducted in secret, except for defence projects. Broad participation of relevant stakeholders (national government, regional authorities, municipalities, lobby groups, political stakeholders, statutory bodies, affected parties and the public) is important to identify the problem, develop better solutions and ultimately achieve project objectives.
Considering the ideas and suggestions of stakeholders in the early stages (before the final details have been worked out and approved) is important, as opposed to waiting until these stakeholders have developed into implacable opponents of the projects. Sidelining stakeholders is a mistake and the national government of Ethiopia should set critical milestones where project initiatives are subject to intense stakeholder consultation, debate and scrutiny.
Often, planning systems and decisions regarding large projects are pervaded by governmental and political processes. However, projects should not emerge as a surprise to the public or any other stakeholder.
Openness, transparency and accountability are key ingredients of good governance; embedding these governance principles firmly in the project governance structures, rules, and procedures can facilitate the selection of suitable project concepts are essential to achieving success.
In Ethiopia, these principles may be applied in relation to small projects, particularly in the regions, but the implementation of large national government projects faces shortcomings. Clear accountability in project governance is important because it provides clarity of decision making.
Who is accountable when large projects end up with excessive cost overruns or benefit shortfalls?
Large projects differ from small projects in terms of their levels of aspiration, lead times, complexity, stakeholder involvement and margins of uncertainty. Therefore, they require a different type of knowledge and experience to develop and execute them.
Ensuring the availability of relevant knowledge and experience in relation to project preparation, execution and operation activities is necessary prior to starting new projects. Ethiopia needs skilled project leaders and professionals for large projects. Therefore, maturing project management capabilities that focus on talent and change management requires extra attention from the national government.
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