Effectiveness of public sector financial planning and budgeting:MTEF budgeting process in the Tanzania LGAs

This study aimed at investigating the effectiveness of public sector financial planning and budgeting: MTEF budgeting process.The study focused on four specific objectives; to review the MTEF budgeting methods used by Public sector, assess if the method (MTEF Budgeting) has achieved its objectives of improving predictability in policy and funding, fiscal discipline and the allocation of resources accordance to strategic priorities, determine the factors which are essential for implementation of effective MTEF in Local Government Authorities in Tanzania and lastly to assess the challenges and opportunities faced by the financial planning and budgeting in the Local Government Authorities in Tanzania.The area of study was at three Local Government Authorities of Ilala, Temeke and Kinondoni Municipal Councils where a total sample of 60 respondents were involved from which 20 employees were chosen at each municipal through purposive sampling.Survey method used to collect data was questionnaires constructed in likert scale for respondents. Data collected were analyzed using Statistical Package for Social Sience (SPSS). The second method was interview, where there was face to face communication between the researcher and respondent to get relevant and in-depth information.The study findings indicated that, the MTEF still has a key role of strengthening budgeting process but has not yet achieved its objectives due to some challenges such as problem of timely funding of budget activities, donor funding dependency, inability of LGA’s to produce reliable economic data and forecast, involatile and uncertain country’s fiscal condition, framework unpredictability and inconsistence in policy and problem in reallocation of resources. Despite various advantages of using MTEF, the study findings compared to former budgeting demonstrated that the LGA’s still lack for effective MTEF budgeting process to achieve the set goals. The study recommends that in order to have an effectiveness of Public Sector Financial Planning and Budgeting; government has to resolve the challenges by: conducting training and seminars to staff; have a realistic budget prepared without budget exaggeration; effective budgets implemented accordance to prepared strategic plan; assure fiscal stability and timely distribution of budgeted funds.