Effect of a Budgetary Control System on the Financial Performance of Manufacturing Companies in Rwanda. A Case Study of Kinazi Cassava Plant

Laurent Ndatimana & Emmaboles Rubunda
University of Kigali
Email: ndatimanalaurent216169976@gmail.com

Abstract: This paper examines the impact of budget planning on the financial performance of manufacturing companies in Rwanda, with an emphasis on the role of budgetary control systems. A descriptive research design was employed, with both quantitative and qualitative research methods. The entire population of 122 employees at the plant was selected as the sample due to the relatively small size of the population. The study used a combination of questionnaires and interviews to collect the data. The findings reveal a significant positive correlation between effective budget planning and improved financial performance, with a Pearson correlation coefficient of r = 0.891, indicating a strong relationship. The mean score for effective budget planning was 4.12, with a standard deviation of 0.56, suggesting a moderate level of agreement among employees regarding the importance of budget planning. Similarly, the mean score for financial performance was 3.98, with a standard deviation of 0.62, indicating that most respondents perceive financial performance as being positively affected by budget planning. Regression analysis further supports this, showing that budget planning is a major predictor of financial performance. The p-value of 0.000 confirms the statistical significance of this relationship, suggesting that the impact of budget planning on financial performance is unlikely to be due to chance. Based on these findings, the study recommends strengthening the budget monitoring system, improving training for financial staff, and aligning budget planning processes with national economic strategies.