Determinants of Agricultural Development Projects Success A case study in Development bank of Ethiopia, Jimma District.

Abstract

This paper investigated the critical success factors of Agricultural Development project Success of Development Bank of Ethiopia, Jimma District. The study was motivated by the very low success rate of project delivery in the country which has created obvious problems of economic development and successive strategic plans of the government. The study sampled sixty two commissioned Agricultural Development projects that had got a financial support from DBE, Jimma district. An objective realization instrument developed using six (6) factors identified in the literature as possible drivers of success in achieving the expected Economic rate of return from the project. All the necessary data were collected from the project files available at DBE, Jimma District. To see the effect the explanatory variables first descriptive statistics were used than the OLS Techniques were applied to see the functional relationship between the Dependent variable Agricultural development Project Success and the Independent variables Project Management Capacity, Time overrun, Cost Overrun, Project Size, Revenue Reduction and Operating Cost Escalation. Additionally, to support the OLS Result an alternative regression approach of Bindery logistic regression model were used. Results of the analysis revealed among others Revenue Reduction, Project Management capacity and Project Size are more critical to the determine the CERR as a proxy of ADPS whereas other factors were found to be insignificant. Controlling revenue reduction, giving technical advice and short term training to commercial size agricultural producers , strengthening their capacity to increase their global competitiveness and focusing in large commercial farms are important to achieve the determined Appraisal economic rate of return (AERR) at completion. And, collective responsibility among project stakeholders is a necessary condition for achieving project successfulness; Ability of project professionals to generate accurate designs, cost and time estimates will minimize the negative effects of economic instability on successful project delivery. Commitment of Clients to project financing obligations is a necessary condition for the project to meet its plans. The recommendation is that there is need for adequate knowhow to determine the economic rate of return at the planning stage of projects.