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Project Financing: Challenges And The Way Forward
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1.2 Statement of the Problem
Project delivery process has no
stage specifically labeled "funding" yet funding challenges affect each
stage of the process which may lead to delay in project delivery or
project abandonment. Abandoned projects range from road projects, real
estate, water projects and housing projects, which are the basic
amenities which any government should provide for its citizens.
(Akhanolu, Ekpefan, Ailemen & Chibuzo, 2016). Most of the survey
results (Frimpong & Oluwoge, 2003) shows that financial constrain is
one of the main causes of delays and project abandonment.
The
financing methods have placed Nigerian infrastructure in horrible states
across the country and there is yet no harmony in the method of project
financing in Nigeria (Oyedele, 2013). The sourcing of funds for
investment in project development poses a great deal due to economic
instability and stringent measures imposed by most financial
institutions. This is compounded by the fact that the Interest rate
structure had had an unfavorable impact on funding the development of
project financing (Akhanolu, Ikpafan, Ailemen & Chibuzor, 2016). The
current infrastructural funding mechanism in Nigeria lack appropriate
performance standards. This deficiency brings about cost overrun, lack
of ability to complete project over specified contract periods, the
associated sharp and corrupt practices within the awarding agencies and
the contract officials (Vanguard, 2011). In most cases, personal
interest of Nigerian leaders overrides public interest in the financing
and management of construction projects (Oyedele, 2013).
According to
Ika (2012) with the increase in oil revenue and other natural
resources, Akwa Ibom State was viewed to have reached the turning point
and set forth in the path to economic growth and industrial development
but contrary to expectation, the State is apparently lagging behind its
contemporaries. There seems to be missing links in the path to
infrastructural development, attempts have been made to explain the
rather paradox; one key factor seems to be recurring and to which the
backwardness in infrastructural development in the state have been
attributed to: this of course is due to lack of sufficient capital. It
is this short of negative situation inspite of abundant natural and
human resource and this have warrant the investigation into the
challenges of project financing in the state, in other to advise
contractors, the government and other stakeholders in the construction
industry on the ways and means of financing construction projects,
particularly in Akwa Ibom State.
1.3 Research Questions
1. What are the sources of project finance?
2. What are the challenges facing project financing in Akwa Ibom State?
3. What are the possible ways of mitigating the challenges facing project financing in Akwa Ibom State?
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