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Development Finance Question Paper
Development Finance
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2010
UNIVERSITY EXAMINATIONS: 2009/2010
THIRD YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CFM 301-F: DEVELOPMENT FINANCE (day + evening)
DATE: AUGUST 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Discuss why domestic savings are an important component of development finance ( 5 Marks)
b) Discuss the steps that African countries could take to boost domestic resources for development
(10 Marks)
c) Discuss why it is important to conduct an economic analysis before a development project is
implemented ( 5 Marks)
d) Discuss the millennium development goal and indicate whether Micro-finance can be key in
the achievement ( 10 Marks)
QUESTION TWO
a) Discuss the role of multilateral development banks in the provision of development finance
(10 Marks)
b) It has become important for an impact analysis to be conducted whenever a development
project is being implemented. Discuss the rationale for conducting impact analysis on
development projects (10 Marks)
2
QUESTION THREE
a) Africa is a region that is acknowledged as being deficient in development finance. Explore
other innovative sources of development finance that countries in sub Saharan Africa can tap
into inorder to accelerate the rate of development and achieve the millennium development
goals (10 Marks)
b) Fred Jones, the project manager at the Jatrop Capital is getting ready to conduct an appraisal of
some development projects that are sponsored by his firm. Discuss how Mr Jones should
conduct the said project appraisals. (10 Marks)
QUESTION FOUR
a) Discuss the merits and demerits of the “build operate and transfer” approach to development
finance
(10 Marks)
b) Recent data suggests that, at the global level, there has been a tremendous increase in the total
value of Official Development Assistance (ODA) and Official Aid from the Development
Assistance Committee (DAC) and non-DAC donors in the last three decades. Total official
flows to all regions of the world increased from about US$6.9 billion in 1970 to US$ 68.1
billion in 1991. There was a decline in the 1990s but this trend has been reversed since the
2000 Millennium Declaration. As at 2004, the figure stood at an all-time high of US$87.3
billion. A large part of ODA from DAC donors represents support to social and administrative
infrastructure. There has also been an interesting shift in the geographic distribution of official
flows. In the 1970s, countries in Asia accounted for a large share of ODA. However, since the
1979 oil-price shock, Sub- Saharan Africa accounts for a larger share of ODA. For example,
over the period 1993-94 about 27 percent of ODA went to Sub-Saharan Africa. The other subregions
of the world got less than 25 percent. For the period 2003-2004, Sub-Saharan Africa
accounted for about 36 percent of ODA This increase reflects recent efforts by OECD countries
to scale up the volume of aid to Africa to enhance prospects for meeting the MDGs.
Required:
Discuss whether this apparent increase in official development assistance is good for
countries in Sub Saharan Africa (10 Marks)
3
QUESTION FIVE
a) One of the main sources of development finance is domestic resources. However the mobilization of
domestic resources for development has been a challenge to many countries. Discuss the main
challenges facing developing countries in their efforts to increase and ensure the predictability of
government revenue (10 Marks)
b) Discuss how to conduct a project appraisal (10 Marks)
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