Determinants Project Failure Financed by Development Bank of Ethiopia: A Case of Jimma District

Abstract

Projects play vital role in implementation of national policies and strategies. That is way World Bank defined project as building block of development. However, projects can fail because of uncertainty to the future. Therefore, studying of project failure gives opportunity for learning from previous mistakes and improve the decision making process. The concept here is to take advantage of the failure and turn the negative feeling around by analyzing what went wrong and correcting it for the future. Thus, this study identified the major determinant for failure of DBE financed projects, measures their significance and proposes the remedy measures. The study considered 60 projects and 50 participants were selected using simple random sampling method and the projects were those financed by DBE over the last five years and which are operational from 2014 – 2019 was collected and the result was analyzed using binary logistic models .The finding of this study portrayed statistical significance of some project specific explanatory variables, such as marketing problem and manpower recruitment variation in aggravating project failure, but project size found to play insignificant role in project failure. Moreover, DBE’s project planning capacity, exchange rate and literacy level are found statistically significant in increasing project failure. Finally, it was recommended that bank should arrange training for local project managers/owners and make stick follow–up on the implementation of the project as per the scheduleresearc