Project Appraisal in Third World Countries by Ruth Thuku

A project is one shot, time limited initiative which is unique i.e.no one project is similar to another that is performed to create change, solve a problem or to improve an existing project. Since a project is carried once in a lifetime never to be repeated again it means a mistake made at the initial stage will carry the error throughout the lifetime of the project, hence the need for project appraisal.
Project appraisal is the process of evaluating the viability of a project before its implementation to avoid failure of the project in the future due to unforeseen risk that could have been planned during appraisal and mitigated.
Project appraisal has four main steps and they include;
1. Idea stage –This is the inception of the project. An idea is initiated in this stage and an analysis for its go ahead to be given. If there is merit to continue it goes to stage two.
2. Preliminary survey- this involves consideration of the projects benefits against cost before a detailed analysis is taken, it includes analysis on finance, market, raw materials availability and quality equipments and availability.
3. Project Appraisal-this is critical analysis of all factors that are included in making the project successful throughout, it is involves planning actual sources of funds and clarification from these institution of their willingness to provide funds, alternative sources of funds, markets of the output, availability of raw materials and their reliability, social, economic, political and environment effect of the project.
4. Implementation stage-this involves procuring equipments on time to avoid delay at the same time avoid storage costs when they bought before completion of the plant construction, plant construction, installation of equipments and commissioning.
This are the procedures required before starting a business to ensure the investor takes a calculated risk but in third world countries projects are determined by;
Political interest-if the ruling party is for the project they force the government into licensing the project appraisal or imposing pressure on appraising officers to approve the project which leads to its failure, also making the government into accepting very expensive projects causing wastage of public funds.
If majority of politicians are against the project due personal interest they cause rejection of very productive projects that could have otherwise been of benefit to the whole country.