Introduction

According to Project Management Institute, Project is a one shot, time limited, goal directed,
major undertaking, requiring the commitment of varied skills and resources. In addition, A
Project is a temporary organisation, either as a freestanding entity or as an integrated component
of a programme, set up to produce something or manage a particular change. On the other hand,
Project management is the application of knowledge, skills, tools and techniques to project
activities in order to meet stake holder’s needs and expectations from a project.

Ethiopian Context

When we come to Ethiopia, most of the projects undertaken by the government and NGOs are
integrated components of the nation poverty reduction program. In addition, private companies
are committing tremendous amount of resource for various types of investment projects targeting
to improve their profitability. In order to understand Project management practices in the context
of Ethiopia, let’s discuss it with the following three categories based on the owners of the
project:

1. State Owned Development Projects

Ethiopian government is engaged in various development projects spanning from mega
hydroelectric dams to social housing projects (condominium projects), rural road construction
projects to airport construction projects, agricultural productivity projects to environmental
protection projects. In all sorts of state owned government projects, detail analysis of projects
feasibility from the point of view of their social significance as well as economic impact is
studied. Most of government owned projects, especially construction projects are go through 5
basic processes such as initiation, planning, execution, monitoring and controlling, as well as
closing processes. In addition, most of the contents of Project Management Body of Knowledge
(PMBOK) guidelines are directly applicable to state owned construction projects.

Project Management Body of Knowledge (PMBOK) guideline list 21 knowledge areas that
should be considered in project management. When we came to Ethiopia, one of the well-known
scholars, Wubishet Jekale (Dr. Eng), regroups those 21 knowledge areas in to five groups based
on his empirical studies on government owned projects management practice. The first group is
called Project Delivery Management and it includes process, procurement and contract related
issues. The second group is called Quadruple Project Constraint Managements such as scope,
cost, time and quality management. The third group is Project Integration Management that
includes communication, changes, claims and dispute management. The fourth category is called
EHSFaS Management such as environment, health, safety, and fire and security management.
The final category is called Project Resource Management such as machinery, human, material
and financial resources management.

2. NGOs Projects
Most of the projects implemented by Non-Governmental Organizations (NGO) are one
sponsored by international donors and most importantly attached with the broader poverty
reduction program of the government. In addition, most of projects managed by Non-
Governmental Organizations (NGO) aims social welfare to the beneficiaries such as child care,
health, education, and projects targeting marginalized class of societies such as citizens with
different types of disabilities. In addition to social welfare projects, Non-Governmental
Organizations (NGO) may set a project to improve themselves such as projects to create a new
program, organizing an event, executing a fundraising campaign, or introducing a new
membership management system.

As it is stated above, fund used in NGOs managed projects primarily comes from international
charities and therefor the donors themselves have their own mechanism of identifying
worthwhile project ideas and managing the implementation of the projects. Projects owned by
NGOs are designed to address the problems faced by beneficiaries, or by the site that is the target
of the project, or (most commonly) both. In addition, in NGOs managed projects, feasibility
analysis of project ideas usually done in a workshop environment where problems and issues are
discussed openly. There are four stages to the Analysis Phase: Stakeholders Analysis; Analysis
of Objectives; Strategy Analysis and Problem Analysis.

Problem analysis identifies the negative aspects of an existing situation and establishes the cause
and effect’ relationships between the problems that exist. It involves: Identification of the major
problems and Development of a problem tree to establish causes and effects. While problem
analysis presents the negative aspects of an existing situation, analysis of objectives describes a
future situation that will be achieved by solving the problems identified. During analysis of
objectives potential solutions for a given situation are identified. This involves the reformulation
of the negative aspects (problems) identified into positive ones (envisioned for the future)
drawing up an objectives tree. In addition, in order to maximize the social and institutional
benefits of the project and minimize its negative impacts, it is extremely important to develop a
comprehensive picture of the interest groups, individuals and institutions connected to the
environmental problem and project idea and this is called stakeholders analysis. The final stage
of the analysis phase involves the identification of possible solutions that could form a project
strategy and the selection of one or more strategies to be followed by the project. During strategy
analysis (or analysis of alternatives) a decision is being taken on which objectives will and which
objectives won’t be pursued within the frame of the project.

3. Private Companies Investment Projects

The goal of private business organizations are profit making and then in the long term
maximization of their owners or shareholders wealth. In doing so, private companies engaged in
various investment projects (capital investment decision) either to maximize their production
capacity, replacement of outdated facilities or to reduce cost.

The technique used to evaluate business projects is called capital budgeting decision and most
businesses in Ethiopia uses the same technique before deciding involvement in business projects.
Capital budgeting is used by business companies to evaluate major projects and investments,
such as new plants or equipment. The process involves analyzing a project’s cash inflows and
outflows to determine whether the expected return meets a set benchmark. The major methods
of capital budgeting include discounted cash flow, payback period, Net Present Value (NPV),
Internal Rate of Return, and throughput analyses.

Summary
The Government of Ethiopia, Non-Governmental Organizations and Private Profit Making
Entities are involved in various types of projects. Project Management Body of Knowledge
(PMBOK) guidelines are used in the case of government led projects. On the other hand, four
stages analysis such as Stakeholders Analysis; Analysis of Objectives; Strategy Analysis and
Problem Analysis are done in the case of non-governmental organizations. Finally, Capital
Budgeting is the main tool used to examine projects initiated by profit making companies.