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The Impact of Accounting Systems on Project Funds Absorption Capacity, Case Study of Agricultural Research Projects in Rwanda

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The Impact of Accounting Systems on Project Funds Absorption Capacity Case study of agricultural research projects in Rwanda By: Laurent NDIRAMIYE, BAS, MBA Maastricht, September 2008 This paper was written in the framework of an MBA thesis at the Maastricht School of Management (MSM) under the supervision of Prof Eno L. Inanga ABSTRACT The absorption capacity is one of key indicators on which financing agencies base the allocation of financial resources to sponsored projects, and should hence be closely monitored. Its level was reported to be low in developing countries, according to studies conducted by the World Bank, the OECD and ODI. However these studies focused on macroeconomic indicators and less on developing …show more content…

This is mainly due to the fact that several programs compete for the agricultural income in developing countries’ agricultural dependent economies. In addition, while the agricultural research is largely financed by private funds in developed countries, the share of the private sector is too low in developing countries. The system relies either on government funding and/or external assistance, especially in Sub-Saharan Africa. According to Pardey et al. (2006), donor contributions (including World Bank loans) in Sub-Saharan Africa accounted for an average of 35% of funding to principal agricultural research agencies in 2000. Even though this share shows a decreasing trend, the share of external funds in agricultural research varies from country to country, as several countries, such as Eritrea, are highly dependent on external aid for agricultural research (figure 1), while others, such as Sudan, use their own internal income to this end. Donor agricultural research financing in developing countries is channelled either through the Consultative Group on International Agricultural Research (CGIAR), a consortium of 15 agricultural research centers , regional research networks, or directly to national agricultural research systems. Sources of external financing

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