Financial Management Methods and The Efficacy of Advance Financing: a case of the Public Infrastructure in Uganda

Abstract

In Uganda, advance financing is a common method for financing public infrastructure. While advance financing is thought to considerably alter the way governments in the developing countries improve infrastructure through offering more financing services that might make a real difference to infrastructural developments, there is a continual uproar about the inefficiencies in Uganda National Roads Authority, principally around the advance funded projects. This study focused on assessing the appropriateness of advance financing arrangements on the efficacy of advance financing of this road. A cross-sectional survey was used to collect data from a total of 204 respondents from Uganda National Roads Authority using self-administered questionnaires. The authors focused on financial stability, professionalism, level of government funding and efficacy of advance financing of the roads sector. Data was analyzed using SPSS 26. Ordinal logistic regressions were run to establish the relationships between the study variables. The findings of the study revealed that good financial management methods were significant positive predictors of efficacy of advance financing of public infrastructure. Also, when the Contractor did their part and accepted status quo other than highlighting objections was found to be a momentous predictor of efficacy of advance financing for infrastructure project. Under government funding, scenarios where government had truthfully rewarded contractors with a sense of achievement positively influenced the efficacy of advance financing of Public infrastructure. Generally, both financial stability and professionalism positively influenced efficacy. 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 efficacy of the project. This therefore calls for sanction on staff working on these projects which is contrary to construction code on public road construction projects since they 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.

Keywords: Financial Management methods, Financial stability, professionalism, Government funding, Efficacy of advance financing, Public-private partnerships, Public infrastructure

DOI: 10.7176/PPAR/13-1-05

Publication date: January 31^st 2023