Challenges in Financial Management of Public Development Project Case Study of Rural Sector Strategy Project in Rwanda

ABSTRACT The study was carried out on the challenges in financial management of public development projects. Using rural sector support programme as the case study. It was carried to assess the challenges that the projects experienced in maiming its financial resources, the causes to such challenges, the impacts the challenges are having on the effectiveness of the project and the variables strategies that were being put in place to solve the challenges that R SSP was facing. The study used a descriptive research design to bring out explanations on the causes, challenging and impacts of poor financial management on the performance ofRSSP. It focused on the government official from the ministry of agriculture, the management of RSSP project and the agriculturalists who are the beneficiaries of the project. It used a sample size of 80 respondents who were selected using simple random sampling and purposive sampling respectively. Data was collected using questionnaires and interviews and was analysed qualitatively using thematic analyzed. From the findings of the study it was founds out that RSSP faced a lot of financial management challenges which included, in financing, failure to meet deadlines and fixed budgets. These were being caused by dependency on donations, poor planning, poor project design and government interferences, these had resulted into delays in meeting deadlines, accumulation of debts , failure to procure goods in time and collapse of some sub-projects. the challenges were being solved by obtaining loans from the central bank, recruitment of more to curb down corruption. There fore, it was concluded that RSSP project faced a lot of challenges in financial management however, the government was putting in place every effort necessary to solve all those challenges.

TABLE OF CONTENTS

DECLARATION ..................................................................................................................................... ii

APPROVAL .................................................................................................................................................. ........ iii

DEDICATION ....................................................................................................................................................... iv

ACKNOWLODGEMENTS ........................................... ........................................................................................ v

LIST OF ABBREVIATION .................................................................................................................................. vi

TABLE OF CONTENTS ...................................................................................................................................... vii

LIST OF TABLES .................................................................................................................................................. X

LIST OF FIGURES ............................................................................................................................................... xi

ABSTRACT ......................................................................................................................................................... xii

CHAPTER ONE ...................................................................................................................................... 1

1.0 Introduction ....................................................................................................................................... I

1. 1 Background to the Study ................................................................................................................... 1

1.I.I Introduction to Financial Management... ........................................................................................ I

1.1.2 Financial Management: Levels ....................................................................................................... 2

I.l .3 Components of Financial Management... ....................................................................................... 3

1.1 .4 Background to the case study ......................................................................................................... 4

1.1 .5 RSSP Project Description ............................................................................................................... 6

1.1.6 Objective of RSSP II ...................................................................................................................... 7

1.1. 7 Project Components ........................................................................................................................ 7

2.2.4 Marshlands and Hillsides Rehabilitation and Development... ........................................................ 7

I.2 Statement of the Problem ................................................................................................................ 12

1.3 Purpose ofthe Study ........................................................................................................................ I4

1.4 Objectives ofthe Study ................................................................................................................... 14

I.4.1 General Obj ective ......................................................................................................................... 14

I.4.2 Specific Objectives ....................................................................................................................... 14

I.5 Research Questions ......................................................................................................................... I4

1.6 Scope of the Study ........................................................................................................................... 14

1.7 Significance ofthe Study ................................................................................................................. I5

1.8 Conceptual Frame Work .................................................................................................................. 16

CHAPTRE TWO ................................................................................................................................... 17

REVIEW OF REIA TED LITERATURE ............................................................................................. 17

2.0 Introduction ..................................................................................................................................... 17

2. 1 Background to Financial Management... ......................................................................................... 17

2.2. Financial Management in Christian Health Association in Kenya ................................................. 19

V II

2.3 The Contribution of Public Finance to Development ...................................................................... 19

2.4 Challenges in Financial Management in Development Projects ..................................................... 20

2.5 Challenges ofFinancial Management in Nepal... ............................................................................ 21

2.6 Impacts of Poor Public Finance Management on Afghanistan's Development .............................. 23

CHAPTER 11-IREE ............................................................................................................................... 25

METHODOLOGY ................................................................................................................................ 25

3.0 Introduction ..................................................................................................................................... 25

3. 1 Research Design .............................................................................................................................. 25

3.2 Study Population ............................................................................................................................. 25

3.3 Sampling Procedure ......................................................................................................................... 25

3.4 Sample Size ..................................................................................................................................... 26

3.5 Sources ofData ................................................................................................................................ 26

3.5.1 Primary Source ............................................................................................................................. 26

3.5 .2 Secondary Sources ........................................................................................................................ 26

3.6 Instruments ofData Collection ........................................................................................................ 27

3 .6.1 Questionnaires .............................................................................................................................. 27

3.6.2 Interviews Guide .......................................................................................................................... 27

3. 7 Data Analysis ................................................................................................................................... 27

CHAPTER FOUR ................................................................................................................................. 28

ANALYSIS, PRESENTATION AND DISCUSSION OF FINDINGS ................................................ 28

4.0 Introduction ..................................................................................................................................... 28

4.1 Biographic Features of Respondents ............................................................................................... 28

4.1.0 Sex ................................................................................................................................................ 28

4.1.1 Age ............................................................................................................................................... 29

4.1.2 Marital status ................................................................................................................................ 29

4.1.3 Level of Education ....................................................................................................................... 30

4.1.4 Designation ..................................... .............................................................................................. 31

4.1.5 Religions Affiliation ..................................................................................................................... 32

4.2.0. Understanding the Concepts of Financial Management... ........................................................... 33

4.2.1. How Finance are Managed in RSSP ............................................................................................ 34

4.2.2 Challenges Facing RSSP in Management of Financial Resources ............................................... 36

4.2.3 Causes offinancial management challenges in RSSP .................................................................. 38

4.2.4 How Management ofRSSP is Trying to Solve the Financial Management Challenges . ............ .40

4.2.5 Impact of Challenges of Financial Management on the Performance ofRSSP in Rwanda ........ .41

4.2.6 Measure to Reduce on Impact of Poor Financial Management.. ................................................. .43

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CHAPTER FIVE ................................................................................................................................... 45

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ......................................................... 45

5.1. Summary ........................................................................................................................................ 45

5.2 Conclusions ..................................................................................................................................... 45

5.3 Recommendations ........................................................................................................................... 46

REFERENCES ...................................................................................................................................... 48

APPENDIX I: Questionnaire for RSSP Management... ........................................................................ 50

APPENDIX II: Interview Guide for Local People and Government Officials ..................................... 54