ABSTRACT

The study examines effect of public financing efficiency on utility project performance taking the case of water sector development programme in Dar es Salaam and Shinyanga Regions in Tanzania. The objectives of the study were to find out how financial planning, financial budgeting, financial reporting, financial release and financial expenditure affect the performance of water utility projects. Performance includes quality of water, regular supply of water, bills and economic development. In methodological aspects, descriptive research design together with qualitative and quantitative approaches was used. Questionnaire and focus group discussion were used to collect data. Multiple linear regression model and chi-square were used to analyze data and displayed in tables, bar charts and graphs. Findings showed that, there is relationship between public financing – the independent variable (financial planning, financial budgeting, financial reporting, financial release and the level of expenditure) and dependent variable (performance of water utility projects). Financial planning, financial budgeting, financial reporting, financial release and level of expenditure had negatively affected performance of water utility projects; the effects were more in rural areas than in urban areas. In order to improve performance of water utility projects the study recommended to release funds from donors directly to water utility projects instead of channeling it via the Treasury this will avoid challenges in releasing of funds. Financial planning and budgeting should be participatory, based on research and should involve more professionals than politicians. For better achievement of the projects’ objectives, compliance to relevant Laws and effective implementation of audit recommendations is highly recommended. To have sustainable rural water projects, bulky water supply through district or regional’s water utilities should be implemented instead of using stand alone systems which faces sustainability problems.