9.6 Public investment appraisal

9.6 PUBLIC INVESTMENT APPRAISAL

Public investment appraisal refers to the evaluation and assessment of potential public investment projects or initiatives to determine their economic, social, and environmental feasibility and impact. It involves a systematic analysis of the costs, benefits, risks, and sustainability considerations associated

with the investment. The purpose of public investment appraisal is to inform decision-making and ensure that public resources are allocated efficiently and effectively.

Steps and considerations involved in public investment appraisal:

1. Project identification and selection: The first step is to identify and select investment projects that align with the government’s priorities and objectives.
2. Cost-benefit analysis: Conducting a cost-benefit analysis is a crucial aspect of public investment appraisal. It involves quantifying the costs and benefits of the project over its lifecycle.
3. Risk analysis: Assessing and managing risks associated with the investment project is essential.
4. Financial analysis: The financial viability and sustainability of the investment project are evaluated through financial analysis.
5. Social and environmental impact assessment: Public investment appraisal includes evaluating the social and environmental impacts of the project.

6. Sensitivity analysis: Sensitivity analysis involves testing the robustness of the project’s financial and economic viability by assessing the impact of changes in key variables and assumptions