A critical evaluation of the effectiveness of the capital budgeting processes for local authorities in Zimbabwe : the case of the City of Harare (2009 - 2012)

Abstract

For most organisations to be effective in this modern world, a lot of careful planning is essential. This has seen a lot of effective organisations apply the “80/20 rule” – alluding to 80% planning, will result in 20% action. Local authorities are not spared from this concept. In order to meet the needs of a highly esteemed commercial citizenry as well as the general needs of the residents of Harare, serious capital budgetary processes par excellence are paramount. A highly productive human capital team underpins this. The overall objective of this research was to establish the effectiveness of the capital budgeting processes at City of Harare through enhanced service delivery. The capital budgeting processes were easily identifiable, as they derive from legal instruments such as the Urban Councils Act (Chapter 29:15). City of Harare constructs capital budget guidelines that clearly give a broad outline of the anticipations of the ensuing year, which are peculiarly aligned to the overall strategy of the organisation. The research also explored the performance of personnel stimulating the budgetary process, which scored alarmingly low. The study was conducted using both quantitative and qualitative methods with data derived from the key stakeholders in the City. It was evident from this research that City of Harare possesses minimal skills and knowledge to effectively budget for capital projects. The research, therefore, recommends that City of Harare engages in performance training in order to both manage and measure performance on all the important components of the process. The research also explored stakeholder participation in the Capital Budget process and generally registered apathy from specific respondents.Notably, council does not have sufficient access to funding for its capital programs and it is recommended to government to incentivise financial institutions to fund local programs.