The predictive validity of feasibility studies of horticultural projects in eastern Africa

Abstract

Whereas the use of feasibility studies in forecasting the performance of horticultural projects has been widely used in the Eastern Africa region, the resulting performance has least matched the expectations. The study looks at ten years of the period 1990 to 1999. The main objectives of this study therefore, are to determine the predictive validity of feasibility studies in horticultural projects, that is, the relationships between forecast performance, as per feasibility studies, and actual results of horticultural projects in the Eastern Africa region. The study will also determine factors of feasibility studies that have a significant influence on the performance of horticultural projects while at the same time identifying key fundamentals that generally cause project failure despite the use of feasibility studies to provide guiding principles for engaging in such projects. From the results of the regression and correlation analyses, the research study has found out that crop yields, total sales and operational costs had a strong relationship between what was forecast and the actual performance of the projects; while selling prices, project capital costs, logistics costs and profits had relatively low correlation values. Further, competitive action, project sizes, crop management practices and employment levels differed significantly from projections, leading to a number of project failures. There was a high correlation level between feasibility studies and actual project performance for project size, crop varieties and their duration to maturity. This meant that forecast values IV gave a good indication of the actual values that would result. Conversely, water consumption, disease incidence, product wastage and employment levels had low correlation values, implying that feasibility studies could not accurately predict the events that followed. The study has also shown that the other important factors that lead to the success of horticultural projects include good previous start-up and professional experience, a good team, commitment of the project sponsor, good labour and financial management