A REVIEW OF CONCEPTUAL AND PRACTICAL PROBLEMS IN THE EVALUATION OF DEVELOPMENT PROJECTS IN NIGERIA
ODUNNAIKE, JOSEPH S. AND OLAGOKE-SALAMI, SEKINAT O, Volume 4 Issue 1, 2020 Pages 146-153, Published: 2021-10-10
Abstract
Investment in development projects is an inevitable activity for the growth and sustainable development of any country. These projects which include but not limited to real estate development are capital intensive, appraisal of the possibility and practicability of such projects is sine qua non to the execution and completion of such projects. This paper reviews the conceptual and practical problems encountered in the evaluation of developmental projects in Nigeria. The traditional and modern methods of evaluation such as Accounting rate of return, Payback period, Residual method, Net Present Value, Internal Rate of Return, Net Terminal Value, Discounted Payback Period and Discounted Probability Index were critically discussed. The method employed by investment advisors is crucial to the success of such investments. Development Projects executed by the Government of Abia State and Abuja Investment and Property Development Company (AIPDC) were some of the projects that failed due to appraisal problems among others discussed. This paper concludes that viability appraisal which is the bedrock of any successful investment, should be seriously and accurately handled by the experts and it must not only be carried out for sake of approval but must be holistically adhered to. The paper therefore recommended that Estate Surveyors and Valuers and other development appraisers should embrace the use of modern development appraisal techniques that incorporate risks while executing the task of investment appraisal in order to enhance appraisal accuracy