Activity – Based Budgeting in the Public Sector

The major advantage of Activity-Based Budgeting (ABB) lies in the association of costs with activities and the outputs generated by those activities through the application of cost drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and quality of production, which makes planning more precise and budget adjustments more meaningful. Other benefits include; improving accuracy in resource needs identification and allocation of cost responsibilities to staff. These advantages place activity-based budgeting well above the traditional budgeting methods such as incremental and line-item approaches normally applied by governments. Efforts have been made to introduce activity based budgeting in most ministries, departments and agencies (MDAs), but its implementation is lacking.

This could be blamed on the lack of continuous comprehensive training, which the proper implementation of the system requires. This Programme is designed to bridge this gap.