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Listed in ULRICH S
Project Consulting and Stakeholders Management
in Developing Economies

Dr. G. F. Okorafor
Department of Project management technology
Federal University of technology, Owerri
Imo state Nigeria

Abstract
Efficient project execution is a pre-requisite for economic and social development especially in
developing economies. Projects are assumed to have been efficiently executed if they meet the
hard criteria for project success namely within cost and time parameters. As public sector
managers cannot meet the demands of economic and social developments on their own, they
usually hire the services of project consultants to help out. These consultants apart from
balancing the factors of time, cost and quality in project executions need to have special
knowledge of stakeholders management if their services would aid development. The absence of
effective stakeholders management could lead to delayed project implementation time, escalating
project costs and possible project abandonments. These are what developing countries with
shortages of capital and skilled labour could not afford to accommodate. Hence, the need for
project consultants to learn the art and science of stakeholders management.
Keywords: Project Consulting; Stakeholders; Management; Developing Economies; Public
sector.
1. Preamble and Introduction
The demarcation of the world into the so called developed, developing, newly industrialized,
under-developed and so on is based mainly on the ability of nations concerned to provide the
necessities of life to its citizens using the factors of production available to them. It is a well
known fact in both the social and economic environments that the supply of goods and services
needed for human sustainability lags behind the demand for such goods and services. The major
work of economists is therefore to balance the demand and supply of the needed goods and
services and hence create what is generally termed the equilibrium position. The balancing act
involves the use of available productive factors to increase the quantum of the existing outputs or

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the creation of new outputs to satisfy newly created demands. The creation of new outputs or the
increase in the quantum of the already existing outputs to meet the increasing demands for them
is what projects are all about. The art and or science of managing the process of the new creation
is the main function of project management. Simply put, projects and project management arise
in order to bridge up the supply deficiency or gap in any system. Without supply gap therefore,
there would be no need for new projects to arise.

2. Project Platforms
The issue of addressing supply gaps is a matter of concern only to human beings. Animals have
no need to embark on project executions because they are incapable of appreciating their basic
minimum needs much more the quantum of supplies available. Equally, machines do not talk
about projects and hence project management. Man, appreciating his basic requirements and the
quantum of each needed tries to make provisions for the shortfall in supply of what he needs.
Unfortunately, not all human beings are in position to take this rationale decision on meeting the
supply gap. The major reason for this is that only a few have the benefit of controlling the
necessary inputs used in production. In order to satisfy the social and economic yearnings of
individuals bearing in mind the availability and control of the necessary resources, human beings
have to be grouped together resources, in various forms. Hence, nations, states, local authorities,
communities etc. have to come into being. The roles of organisations in meeting human
aspirations have been widely discussed Stoner et al (2000); Cole (1990).
These organisations may be public or private but for the purpose of this work, we shall lay
emphasise on the public sector organisations. What we are saying however is that the main
platform for project executions are organisations but that we are laying emphasise on the public
sector organisations.
3. Public Sector in Developing Economies
In developing economies, the public sector provides the stimulus for the development of the
economy and this development can only be measured by how well the basic necessities have
been provided to the populace. The public sector in most cases apart from providing an enabling
operating environment for the private sector initiatives to thrive, takes active part in the
production of goods and services, hence the supply function in the society. A good percentage of
productive factors are publicly owned and controlled. The operators of the public system called

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the managers utilise the public resources for the benefit or otherwise of all the people. This
control of the public resources have led to bitter struggles between opposing groups or political
parties in the affairs of the developing nations. These political managers take care of the
development of their various areas through the use of the capital expenditure components of their
budgets. As public sector managers who are expected to provide the bridge between the supply
and demand of various items and services, they need to employ the services of specialists in
various sectors of the economy. Hence the need for the services of consultants. The need for the
economy to expand at a rate commensurate to its developmental needs and the limited
knowledge and skills of the political managers have made it imperative that the services of
different specialists in various sectors of the economy have become necessary. Hence, the
increasing need of specialist consultants by developing economies.
4. Projects and Development
Different authorities have defined the concepts of projects and development from different
angles and dimensions. Generally, a project could be summarised as the creation of new
capacities/capabilities to satisfy given needs while development could be seen as quantitative and
qualitative improvement in the affairs of man. Todaro (1994); Reomer & Stern (1981); Squire &
Van der Tak (1975); Cleland 1996; PMBOK 2004; UNIDO 1986; Baum 1970; etc have all done
serious works on the above concepts and the linkage between them. We do not need to dwell so
much on them again. It is however important to remind ourselves of what we may call the hard
facts of a project and these are that projects are constrained by cost, time and quality
specifications. Therefore, a consultant contracted to handle a project must make sure that he/she
keeps within the cost and schedule parameters as well as the quality specifications. It has always
been assumed that if these criteria are adhered to, the project in question would meet the
expected objectives. A lot has passed through the bridge of recent that strict adherence to the
above criteria does not ensure the delivery of the project as planned and hence the inability of
development to progress as planned. The will to adhere to the said critical factors in project
execution is nomore enough to ensure planned development process. The additional necessary
factor to be taken into consideration in the development process in developing economies is the
role(s) of the critical stakeholders. This is very important in the work of project consulting in
developing countries as the role(s) of the stakeholders can and do have adverse impact on costs
and time dimensions for project executions.

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5. Stakeholders
PMI recognised the importance of stakeholders roles in ensuring the success of projects and
hence smooth development of an economy when it devoted a good portion of the PMBOK
(2004) chapter 2 and chapter 10 to the treatment of stakeholders management. The Guide 2004
recognised a stakeholder as a person and or organisation that is actively involved in a project
execution or whose interests may be positively or negatively affected by the execution or the
completion of the project. The import of this is that the actions or inactions of the critical
stakeholders can cause the cost and schedule of a project to over run the estimates. The impact
of this must be weighed in a deficit resource economy. Boddy and Paton (2004) share identical
views with PMI on stakeholders function. Bourne & Walker (2005) are of the view that the
knowledge of the critical stakeholders can be a considerable asset to an organisation because
such knowledge will contribute insight and support in shapping the project brief as well as
supporting the execution. Management of stakeholders for fruitful project executions have led
many authors to proffer ways of carryout stakeholders analysis. Some of these include Mitchell
et al (1997); Hammati et al (2002); Lever (2009) and Mind Tool (2009)
All the authors are in agreement that stakeholders analysis should take three steps in summary
thus:
i. Identification of the primary, secondary and key stakeholders

ii. Assessment of the interests of the identified stakeholders

iii. Determination of the likely impact of the various interests and how best to handle these
interests in order to mitigate their negative impacts.

It is very important that any consultant engaged by governments to package projects for
execution in the process of national development should critically analyse and identify critical
stakeholders in the projects involved. If this is done, the true cost and time of execution will be
identified early enough and hence fully incorporated.
6. Stakeholders Management and Nigerian Economy
For the purpose of x-raying the impact of stakeholders management on Nigerian economy, we
will limit our discourse to three main areas thus:
i. Academic Staff Union of Universities (ASUU) strike in Nigeria

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ii. The Niger-Delta crises

iii. Residential Accommodations

7. Academic staff union of universities strike (ASUU)

The academic staff of the public universities have been on strike since June 2009 and as at
October 2009, the doors of the universities have been under keys and lock. To worsen the
situation, all other staff unions in the universities later joined the strike and have since been on
strike like the ASUU. The main cause of the strikes has been the governments inability to sign
already negotiated collective agreements on the running of the university system. Government
by not taking into consideration the key stakeholders views and perceptions has caused untold
delays and hardships on project implementations in the education sector of the economy.
Tertiary education is a project to the concerned students and failure to take into consideration the
positions of the critical stakeholders prolongs the time of the completion as well as the attendant
cost-overuns. Of course the quality of the graduates finally turned out is negatively affected
What roles are consultants expected to play in order to lessen the impacts of these. One of the
roles hinges on proper assessment of capital costs. Capital projects in the sub-sector cost more
because of the lost time due to strikes as necessary supervisions, preparations of payment
vouchers and so on cannot be carried out by people on strike. Secondly, the cost of maintaining
a student in the university which is one of critical bases for institutional funding cannot be easily
determined as no one is sure how long a student would take to complete his/her study. All these
lead to inappropriate costings of projects in the educational sector of the economy. Consultants
to the sector must learn new tricks in order to keep pace with the hard criteria of project success
namely cost and time.
8. Niger Delta i Crisis
Nigeria is a mono-export nation and depends more than 70% on the revenue from crude oil
export for her operations. The oil comes mainly from the Niger-Delta area of the country.
Currently, it is estimated that the nation looses more than 40% of her potential crude oil export
because of the crises in the region. Crude oil drilling and general investments in the oil sector
are highly expensive as well as highly risky. A stable environment is therefore needed to derive
optimum returns from the sector. But what is the basis of the Niger-Delta crisis. The simple
cause is lack of effective management of the key stakeholders in the area. Governments and

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their investment partners pretended that biased and selective treatment of the stakeholders in the
area would assure them of free operations. The worst mistake on their part was the inability to
critically carry-out stakeholders analysis much more determining their interests and influences.
The resultant kidnappings of the critical specialists in the sector and the subsequent demand for
ransomes are outcomes of the stakeholders management failure. No project currently in the oil
sector can be delivered as planned because of the activities of the so-called militants. The
activities are fallouts of ineffective stakeholders management in the sector. The full impact on
the economy is increased cost of project delivery and lower revenue derivation. The current
amnesty to the Niger-Delta militants by the Federal Government of Nigerian as a means of
bringing sanity to the Niger-Delta area of the country appears to us to have been put in place
without full stakeholders analysis. This can be seen from the number of requests for extension of
the date-line for the amnesty. Eventhough, Federal Government appears to be forcing its way
into the amnesty time implementation, we are of the belief that the militants appear to be
complying because of the seemingly superior power of the state. We are of the opinion also that
the surrender of the arms and ammunitions are more symbolic than real. Much arms and
ammunitions may be piled up somewhere for possible future use. It proper stakeholders analysis
was carried out before implementation. It would have been possible to have a clear assessments
of the capabilities of each group and hence have yard stick for measuring each compliance to
the demobilisation.
A seed for future crisis may have been sowed by the manner of the current exercise. Project
consultants in Nigeria s oil industry must therefore learn that projects costs and time are not
purely as calculated during the planning but based more on reactions of stakeholders at each
point in time. A buffer zone must be created to take care of the stakeholders interests as they
arise.
9. Residential Accommodation
One of the greatest problems facing the ordinary Nigerian is residential accommodation. In
order to tackle this problem, various tiers of government have had to set up housing corporations
to provide land for owner-occupiers developments. This strategy has not yielded the desired
results because of ineffective stakeholders management. Most housing estates started have been
abandoned because the recipient plot owners could not take effective occupation of the assigned
plots. The simple reason being that governments were unable to meet the stakeholders

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requirements in the form of payment of compensations. In most cases, the actual stakeholders
were not fully identified and these lie in wait for the supposed plot allotees to surface. Because
of this inappropriate stakeholders management, the problem of housing provision will continue
to be a mirage to the common Nigerian citizen.
10. Conclusion
The public sector is the engine and catalyst for project execution and hence economic and social
development in developing economies. However, the managers of the public sector are limited
in their knowledge and skills and cannot handle all project developments on their own. They
therefore need the services of specialist consultants to perform a lot of the jobs for them. It is
important to note that these consultants try as much as possible to meet the hard criteria of
project successes in their actions but attempts to meet them does not ensure project successes. A
critical component to ensure project success is an effective management of the critical
stakeholders. The inability to effectively manage the stakeholders may most probably lead to
delayed implementation; escalating costs and sometimes project abandonments. These are not
good enough for developing economies where capital and skilled labour are in short-supply.
Project consultants in developing economies must therefore learn the art of stakeholders
management in carrying out their functions.

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