IMPACT OF BUDGETING ON THE EFFECTIVE RESOURCE ALLOCATION OF MANUFACTURING INDUSTRIES IN RWANDA A CASE OF CIMERWA Plc (2020 - 2023)

Abstract

The primary objective of this study was to evaluate the impact of budgeting on the effective resource allocation at CIMERWA Plc. Specifically, the study aimed to assess the effect of budget planning on resource allocation; evaluate the influence of budget implementation on resource allocation; investigate the role of budget control in optimizing resource allocation efficiency; examine the integration of technology in budgeting practices and its effect on resource allocation; and analyze the relationship between budgeting practices and resource allocation outcomes at CIMERWA Plc. The study employed a descriptive research design, with a target population of 71 employees from CIMERWA Plc’s Kigali office. Through simple random sampling, a sample size of 34 respondents was determined using the Slovin formula. Primary data were collected using a structured questionnaire. The findings indicate that respondents perceived budget control at CIMERWA Plc to be highly effective, as reflected by a mean score of 4.17, suggesting its significant role in resource allocation. Correlation analysis revealed a strong, positive, and significant relationship between budget control and effective resource allocation (r = 0.961, p = 0.000 < 0.01). Further, multiple regression analysis showed that budget control accounted for 92.4% of the variance in effective resource allocation, as indicated by an R2 value of 0.924. The calculated F-value of 1234.612 exceeded the critical value, with a p-value of 0.000, affirming the model's robustness and the significant effect of budget control on resource allocation at CIMERWA Plc. The results further demonstrated that budget control has a significant positive impact on resource allocation, with β1 = 0.961, p = 0.000 < 0.05, t = 35.137. This implies that a one-unit improvement in budget control would lead to a 0.961-unit enhancement in resource allocation efficiency. The study concludes that budgeting dimensions—budget planning, implementation, control, and technology integration—positively impact effective resource allocation at CIMERWA Plc, successfully achieving all research objectives.