Performance Budgeting in Local Government: A Case Study of eThekwini Municipality in South Africa

Abstract

Performance management is fundamental to New Public Management thinking which dominated the 1990s. Performance budgeting is basically a process where there has to be a positive linkage between the funds allocated and measurable results. There has to be a shift in focus from the emphasis being on funds allocated for programmatic activities to more specifically results that can be achieved. Several African countries including South Africa have been prioritising the performance aspect of budgeting. There is a need for reform in performance budgeting in eThekwini City Council. Organisational performance has been directly linked to the performance of senior managers. Some of the challenges/constraints identified in the implementation of performance budgeting are inappropriately defined projects/programmes resulting in poorly defined project plans and matching budgets; unreliable data and evidence to support the project status; lack of integration of performance and budget information; budgets cannot be allocated to operational projects and difficulty in monitoring actual spend with actual delivery of programmes/projects. It is likely that the budgetary reform being undertaken nationally will eventually lead to stability in performance and the budgeting system in the Municipality. The paper is a critique of both primary and secondary literature on performance budgeting in an African and South African context, using eThekweni Municipality in Durban as a local case study. The basis of the study was desktop research, notably books; journals; publications of international development organisations; newspapers, websites, legislation/policies and official publications.