Financial management practices and effectiveness of pre-financing on Kampala–Entebbe expressway in Uganda

Abstract

Pre-financing has been one of the commonest methods for financing public infrastructure in Uganda. Although pre-financing is believed to drastically transform the way governments in the developing world improve infrastructure through offering more financing services that could make a real difference to infrastructural developments, there is a continued outcry that there are a number of inefficiencies in Uganda National Roads, particularly Kampala–Entebbe Expressway. This study focused on assessing the appropriateness of pre-financing arrangements and to reflect on whether it contributes to positive development outcomes or are a resource curse. A descriptive cross-sectional survey was used to collect data from a total of 204 respondents form Uganda National Roads Authority using a well-designed questionnaire focusing on financial stability, professionalism, level of government funding and effectiveness of pre-financing on the success of Kampala-Express Highway. Data was analyzed using SPSS 26 and ordinal logistic regression was run to establish the study relationship. The findings of the study revealed that proper utilization of borrowed money was a significant positive predictor of effectiveness of pre-financing of Kampala–Entebbe Expressway (B= 0.885, p= 0.008, OR= 2.422, CI (1.258, 4.664). Similarly, when the Contactor did their part and accepted status quo without raising difficult questions (B= 0.82, p= 0.007, OR= 2.271, CI (1.252, 4.122) was a significant predictor of effectiveness of pre-financing for the project. Under government funding, scenarios where government had properly rewarded contractors with a feeling of accomplishment (B= 1.22, p= 0.000, OR= 3.389, CI (1.861, 6.172) was also found to positively influence effectiveness of pre-financing of Kampala–Entebbe Expressway. Generally, both financial stability and professionalism positively influenced effectiveness. However, the study findings revealed that when the government meets the agreed target with contractors before full implementation of the project, there is a negative influence on effectiveness of the project. This calls for sanction on staff working contrary to construction code on public road construction projects are designed for a specific purpose using taxpayer’s money through government who are accountable to confirm that the funded projects follow their predetermined targets.