Evaluation Of Financing Options For Public Sector Projects: A Study Of Selected Projects In Imo State.

ABSTRACT 

This work evaluated the extent to which various sources of funds are used in financing public sector projects in Imo State. The study was motivated by the ever increasing cases of inadequate project financing and financial management, which has created problems of illiquidity, insolvency and abandonment in the public sector. The objective among others, is to assess the extent to which mixed-financing options can be used to enhance the availability of both short and long term funds to public projects, through the formal and informal financial system. In carrying out this investigation ten (10) public sector projects were sampled. The opinion of twenty (20) cost engineers participating in the projects as either representatives of main contractor, sub contractors, consultants, suppliers or vendors were sought through the questionnaire. In all, fifteen (15) of them actually returned their questionnaire. Their responses were coded and quantified. The quantified response was analysed using the coefficients of correlation (R), the coefficient of determination (R2), the F test, the t-test and a linear regression model. The results of the analysis among others, show that increased use of capital market funds (development bonds and debentures), money market funds (medium term bank loans) as well as informal sector funds (lease, supplier credits, etc) have more likelihood of leading to successful financing of public sector projects as opposed to much reliance on governmental budgetary allocations, but for this to be possible government must provide the enabling environment.   The study therefore recommends for increased use of public-private sector financing structure for public sector projects in Nigeria. 

Key words: Public Private Partnership, Project finance, Leasing, Buildown-operate-Transfer, Overdraft, Long-term loan, Bond, Debentures.