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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

Author

Listed:
  • Shamba, Mununga

    (Graduate School of Business, University of Zambia)

  • Machayi, John

    (Graduate School of Business, University of Zambia)

Abstract

This research assessed the effect of capital budgeting techniques on the sustainability of investment projects in local authorities in Zambia, with a focus on Shang’ombo Town Council. The study adopted a qualitative research approach using a case study design. Data were collected through in-depth interviews with forty-three (43) officials who possess expertise in budgeting and investment administration. The data were analyzed using thematic analysis. Findings revealed inconsistency in the application of investment appraisal techniques and, in some cases, complete absence of their application. Other challenges identified include limited institutional capacity, inadequate technical expertise in applying investment appraisal techniques, and failure to incorporate environmental and social considerations into project evaluation processes. Local authorities in Zambia play a critical role in regional development through capital investments such as infrastructure and community projects, and they often undertake commercial ventures to strengthen their financial sustainability. The study recommends that local authorities ensure consistent application of capital budgeting techniques to reduce investment failure and enhance the sustainability and viability of investment projects. It further recommends capacity building for staff involved in investment administration and budgeting, as well as the integration of environmental, social, and economic considerations into investment appraisal processes. Future research is encouraged to expand the scope by examining multiple councils and larger sample sizes to strengthen the body of knowledge on investment appraisal practices in local authorities.

Suggested Citation

  • Shamba, Mununga & Machayi, John, 2026. "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," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 7(2).
    • Handle: RePEc:cwk:ajocsk:2026-25
    DOI: 10.59413/ajocs/v7.i2.6
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    References listed on IDEAS

    as
    1. C. Jevons Lee, 1988. "Capital Budgeting Under Uncertainty: the Issue of Optimal Timing," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 15(2), pages 155-168, June.
    2. Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
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    More about this item

    Keywords

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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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