Always Late: Measures and Determinants of Disbursement Delays at the African Development Bank

Abstract

Over the years, an abundant number of studies have pointed to long delays at project start-up as one of the main impediments to the performance of development operations in Africa. The influence and importance of time delays on project performance emphasizes the need for a systematic effort to understand why some projects delay so much and others do not. This study attempts to identify the projects’ characteristics which affect the probability to experience delays. Using a sample of African Development Bank Projects, statistical and econometric analyses are employed to identify the determinants of long delays in project start-up in the agricultural sector. The dataset used, consists of all the 525 agricultural sector operations approved by the Bank between 1990 and 2007.Analyses generally reveal that long gestation and delays at project start-up is prominent for agricultural sector projects and is a potential bottleneck for the Bank funded operations. Time delays have significantly improved for newly approved operations. Close to half of the time delay to the first disbursement is due to the delay between commitment and loan effectiveness. Multinational projects are significantly more efficient in term of delays at start-up. The smaller the cost of the operation, the greater will be the probability to experience long start-up delays. The longer the planned implementation period of a project, the higher the start-up delay will be. Projects with many components have lower probability of experiencing delays at start up. After a project has entered into force, the time elapsed to first disbursement will be longer for ADB countries.The paper concludes by outlining a number of implications for effective strategies to mitigate long delays encountered throughout the project cycle in the agricultural sector. Keywords: Project Delay, project performance, Agricultural sector, African Development Bank, Africa JEL codes: O19 ; O55 ; P45 ; F34

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