INTRODUCTION
Budgeting is a core function for every organization or government. The concept of budgeting
is defined as planning and allocating financial resources effectively among different uses. This
is hence why different types of budgeting exists to fulfil different mandates. Among many
different types of budgeting there is recurrent and development budgeting of which will be the
focus of this essay. This essay will start off by giving brief definitions of these key concepts.
This essay will then focus on distinguishing between the recurrent and development budgeting
followed by a summary of the prevalence of development budgeting across the levels of
Botswana government in both central and local government. It will then move on to explain
why debt finance is potentially appropriate for development budgeting but not for recurrent
budget. Finally, a conclusion that synthesizes main arguments and findings will be provided.
RECURRENT BUDGETING- (Wangare, 2020) states that ‘recurrent expenditures mainly
refer to spending on salaries, wages, operations, current grants and purchase of goods and
services.’ In short that is to say that recurrent budgeting is the process of allocating financial
resources to fund operations that occur on an ongoing basis.
DEVELOPMENT BUDGETING- ‘It is a budget for public investment aimed to fund public
infrastructure such as roads, schools and hospitals.’ (Hungamo, 2021). Development budgeting
can therefore in short be defined as a process of allocating financial resources towards public
projects and programs.
DISCUSSION
DISTINGUISHING BETWEEN RECURRENT AND DEVELOPMENT BUDGETING
Recurrent budgeting and development budgeting are two methods of fund allocation that share
common elements. While the two share certain similarities they also have their distinct
attributes. These differences will be explained in terms of the flexibility of both types budgeting
and the process of funds allocation in both types of budgeting.
FLEXIBILITY OF THE BUDGETS-Flexibility of both types of budgeting in this case refers
to their ability to accommodate change. Recurrent budgeting is less flexible as it focuses mainly
on allocation of funds towards operational expenses of which are mostly fixed. These
operational expenses must be paid regardless of any circumstances so as to ensure smooth
running of the organisation. This therefore limit organisation’s ability to reallocate their funds
to any other areas unless it is for operational expenses. According to (Motlhajoe, 2024) in
1
, Botswana ‘The largest allocation of the recurrent budgeting is to the Ministry of Education and
Skills Development. In the drive to transition the country to a knowledge-based economy, the
allocation of P15.54 billion represents 24.38 percent of the recurrent budget. Amongst other
things, the proposed budget will be utilized to ensure delivery of quality curriculum
development needed to enhance the knowledge and capability skills of learners.’ This is
therefore a demonstration of funds being directed to an existing operational cost of which is
the current curriculum. A lumpsum amount is being directed to develop this existing
operational expense instead of reallocating to a different new project of which justifies how
less flexible the recurrent budget is.
Development budgeting on the other hand is more flexible than recurrent budgeting.
Development budgeting mainly focuses on major new projects and initiatives as well as the
ongoing projects. In context of Botswana, it is such that (Motlhajoe, 2024) states that ‘The
increased budget allocation will be focused on ongoing infrastructure projects such as Traffic
Signal Modernisation and Central Traffic Control for greater Gaborone. The allocation will
also cover upcoming road projects including Mogoditshane-Gabane- Mmankgodi Junction
dualling.’ This demonstrates the ability of the development budgeting to fund a range of
projects of which justifies that it is more flexible.
THE PROCESS OF FUNDS ALLOCATION- The manner in which funds are allocated for
both recurrent budgeting and development budgeting is different. In recurrent budgeting funds
are allocated on a regular ongoing basis. Ongoing basis in a functional organisation may mean
on a monthly or annual basis. A plan is drawn that shows the organisational fixed expenses to
be paid for and the amount required for these expenses. The amount allocated may vary
periodically but the fixed expenses remain consistent.
Development budgeting on the other hand has its funds allocated based on the projects at hand.
That is to say that allocation of funds is done on a project-by-project basis. A clear evaluation
and estimation of funds that may be needed for a particular new project is made and funds that
may be required are allocated. Here every new project has its own budget set aside designed
specifically to meet its unique needs. To exemplify this, it is such in the year 2007 there were
budget allocations for development budgeting made and is such that according to (Piet, 2007)
‘Ministry of health has been allocated P636 million for development budget to improve
hospitals and the Institutes of Health Sciences.’ On another project catered for (Piet, 2007)
continues to justify that ‘The Ministry of Education has been allocated P584 million from the
2
Budgeting is a core function for every organization or government. The concept of budgeting
is defined as planning and allocating financial resources effectively among different uses. This
is hence why different types of budgeting exists to fulfil different mandates. Among many
different types of budgeting there is recurrent and development budgeting of which will be the
focus of this essay. This essay will start off by giving brief definitions of these key concepts.
This essay will then focus on distinguishing between the recurrent and development budgeting
followed by a summary of the prevalence of development budgeting across the levels of
Botswana government in both central and local government. It will then move on to explain
why debt finance is potentially appropriate for development budgeting but not for recurrent
budget. Finally, a conclusion that synthesizes main arguments and findings will be provided.
RECURRENT BUDGETING- (Wangare, 2020) states that ‘recurrent expenditures mainly
refer to spending on salaries, wages, operations, current grants and purchase of goods and
services.’ In short that is to say that recurrent budgeting is the process of allocating financial
resources to fund operations that occur on an ongoing basis.
DEVELOPMENT BUDGETING- ‘It is a budget for public investment aimed to fund public
infrastructure such as roads, schools and hospitals.’ (Hungamo, 2021). Development budgeting
can therefore in short be defined as a process of allocating financial resources towards public
projects and programs.
DISCUSSION
DISTINGUISHING BETWEEN RECURRENT AND DEVELOPMENT BUDGETING
Recurrent budgeting and development budgeting are two methods of fund allocation that share
common elements. While the two share certain similarities they also have their distinct
attributes. These differences will be explained in terms of the flexibility of both types budgeting
and the process of funds allocation in both types of budgeting.
FLEXIBILITY OF THE BUDGETS-Flexibility of both types of budgeting in this case refers
to their ability to accommodate change. Recurrent budgeting is less flexible as it focuses mainly
on allocation of funds towards operational expenses of which are mostly fixed. These
operational expenses must be paid regardless of any circumstances so as to ensure smooth
running of the organisation. This therefore limit organisation’s ability to reallocate their funds
to any other areas unless it is for operational expenses. According to (Motlhajoe, 2024) in
1
, Botswana ‘The largest allocation of the recurrent budgeting is to the Ministry of Education and
Skills Development. In the drive to transition the country to a knowledge-based economy, the
allocation of P15.54 billion represents 24.38 percent of the recurrent budget. Amongst other
things, the proposed budget will be utilized to ensure delivery of quality curriculum
development needed to enhance the knowledge and capability skills of learners.’ This is
therefore a demonstration of funds being directed to an existing operational cost of which is
the current curriculum. A lumpsum amount is being directed to develop this existing
operational expense instead of reallocating to a different new project of which justifies how
less flexible the recurrent budget is.
Development budgeting on the other hand is more flexible than recurrent budgeting.
Development budgeting mainly focuses on major new projects and initiatives as well as the
ongoing projects. In context of Botswana, it is such that (Motlhajoe, 2024) states that ‘The
increased budget allocation will be focused on ongoing infrastructure projects such as Traffic
Signal Modernisation and Central Traffic Control for greater Gaborone. The allocation will
also cover upcoming road projects including Mogoditshane-Gabane- Mmankgodi Junction
dualling.’ This demonstrates the ability of the development budgeting to fund a range of
projects of which justifies that it is more flexible.
THE PROCESS OF FUNDS ALLOCATION- The manner in which funds are allocated for
both recurrent budgeting and development budgeting is different. In recurrent budgeting funds
are allocated on a regular ongoing basis. Ongoing basis in a functional organisation may mean
on a monthly or annual basis. A plan is drawn that shows the organisational fixed expenses to
be paid for and the amount required for these expenses. The amount allocated may vary
periodically but the fixed expenses remain consistent.
Development budgeting on the other hand has its funds allocated based on the projects at hand.
That is to say that allocation of funds is done on a project-by-project basis. A clear evaluation
and estimation of funds that may be needed for a particular new project is made and funds that
may be required are allocated. Here every new project has its own budget set aside designed
specifically to meet its unique needs. To exemplify this, it is such in the year 2007 there were
budget allocations for development budgeting made and is such that according to (Piet, 2007)
‘Ministry of health has been allocated P636 million for development budget to improve
hospitals and the Institutes of Health Sciences.’ On another project catered for (Piet, 2007)
continues to justify that ‘The Ministry of Education has been allocated P584 million from the
2
