Evaluating the Impact of Capital Budgeting Techniques on sustainability of Investment projects in Local Authorities in Zambia: A case study of Shang'ombo Town Council.
DOI:
https://doi.org/10.59413/ajocs/v7.i2.6Keywords:
Investment Appraisal Techniques, Capital Investment Projects, Sustainability, Viability, BudgetingAbstract
This research focused on assessing the effect of capital budgeting techniques on the sustainability of investment projects in local authorities in Zambia. The study was carried out in Shang’ombo district. A qualitative research approach was adopted and used a case study research design. The data used in the study was collected using in-depth interviews from forty-three (43) officials who are experts in budgeting and investment administration. Data was analyzed using themes. According to the study findings it was established that there was inconsistency in the application of investment appraisal techniques and in most cases no application at all, lack of capacity and inadequate expertise in application of investment appraisal techniques and failure to incorporate environmental and social components in the investment appraisal techniques were the challenges faced. In Zambia, local authorities play a significant role in driving regional development through capital investments such as infrastructure and community projects. Local authorities in Zambia engage in investment projects known as commercial ventures in order to increase its financial capacity and financial sustainability. The study therefore recommended the Council to be consistent in the use of capital budgeting techniques in order to eliminate or reduce on investment failure and improve on the sustainability and viability of commercial ventures. The study also recommended the Council to consider capacity building for staff in investment administration and budgeting and incorporate environmental, social and economic aspect when choosing any type of investment appraisal for it to be effective and efficiency. This may address the challenges faced in investment appraisal techniques. Finally, the study recommends that other researchers extend the scope by studying more than one council and increased sample size and improve the contribution to the body of knowledge on the subject matter.
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