Authors: Dr. Stephen K. A. Hammond, DBA1, Dr. David Ackah, PhD2
1Project Management Unit, GCB Bank
2President, Institute of Project Management Professionals
Email: stepham_k@yahoo.com, drackah@ipmp.edu.gh
Abstract
International donor agencies continue to register their displeasure over the manner in which funds allocated for poverty reduction and development projects are recklessly managed. World Bank’s Vice President for Poverty Reduction and Economic Management, Danny Leipziger was reported in the 5th December 2008 edition of the Ghanaian Times as saying “Transparent public institutions and the fight against corruption are key for poverty reduction and economic growth,” he added that “The current financial crisis shows how important transparency, good governance, and effective regulation are in all parts of the world”. On his part the UK Minister for International Development, Ivan Lewis also exclaimed that good governance is at the heart of development and poverty reduction and that “DFID is committed to the global effort to build effective states that serve the needs of their citizens and stamp out corruption. The government partnership facility being envisaged by the Donor Agencies will help create the conditions that will enable millions of people in the developing world to step up from poverty”. Ghana’s development partners are worried that if funds for poverty reduction projects were not properly managed the necessary safety nets and structures can hardly be established to shelter the vulnerable and keep up the development momentum. Bert Koenders, the Netherlands Minister for Development and Cooperation did not mince words in asserting that” corruption and bad governance obstruct equitable development of poor countries, and that is unacceptable.”
Norwegian Minister of Environment and International Development, Erik Solheim also lambasted the executives of developing countries when he indicated that”… several hundred billions of US dollars are illicitly transferred from developing countries each year and this undermines the mobilization of domestic resources, reduces funding for development, facilitates criminal activities, weakens accountability and increases inequality. On the local front, the educational sector has a catalog of abandoned government projects. The new Chemistry Department of the University of Ghana, for instance, commenced in 1979 when Dr. Ivan Addae Mensah was only a lecturer at the science faculty. He rose through the ranks to become a full professor and even the vice chancellor of the university before the project was completed in 2002. The yet to be completed tallest building in Accra near the British Council Library or the Cedi House, funded by Social Security and National Insurance Trust, had its sod cut in 1998 when Jerry Rawlings was in the helm of affairs at the Osu Castle. One is at a complete loss as to when this building project would be handed over for commissioning. Perhaps it might be needless to ascertain the number of upward adjustments to the cost of this project that has been made. Street lighting project commenced decades ago, has not been managed successfully. Traffic lighting systems, even in the capital cities are in deplorable state. Some Traffic lighting systems at intersectional roads in Accra have been permanently out of order for long periods resulting in serious vehicular accidents thereby defeating the rationale behind the installation of these traffic control lights. What exactly might have happened to the project management skills of the officials entrusted with the day to day management of these traffic lights?
The National Health Insurance Scheme and Metro Mass Transit projects are virtually on its knees as a result of corrupt officials who condoned with service providers to defraud the projects. The million dollar question that readily comes to mind is whether the risk factors associated with most of the aforementioned projects were adequately isolated and mechanisms put in place towards addressing this risk factors before and during the implementation of these projects. Brigham and Ehrhardt (2005) argue that “as businesses and projects become increasingly complex, it is more and more difficult for the CEOs and directors to know what problems might lie in wait. Therefore companies need to have someone systematically looking for potential problems and design safeguards to minimize potential damage”. This is where projects and businesses ought to have ‘risk managers’ who assume risk management responsibilities. According to March and Shapira (1987), Risk management involves identifying the risks faced by the project, measuring the potential effect of each risk and deciding how each relevant risk should be handled. Baird and Howard (1985) further added that risk management attempts to reduce the probability of occurrence of an adverse event, reduce the management of the loss associated and totally avoiding the activity that gives rise to the risk. The study examines the risk management challenges associated with the Metro Mass Transit project and the National Health Insurance scheme.
Keywords: Project Risk Management, Project Implementation, Project Executive, Project Management, Risk Control
