Dissertation (MA Public Administration)The study is intended to assess community capacity in managing development projects, their perceptions on development aid and community participation on various stages of project cycle management. The assessment of sustainability of development projects was conducted in two villages namely Mvumi and Buigiri. The study involves a sample of 99 respondents who were beneficiaries of the community development projects undertaken in the study cases. In addition to these respondents, the study also consulted project officers, and village executive officers in acquisition of some important information pertaining to the study. Purposive sampling technique was used in selecting the above mentioned sample and the method used in data collection included questionnaire and interviews. The results revealed that project had very limited impact on imparting managerial skills over the project execution. In addition, the study also revealed that many people are still having perceptions that hinders sustainability as did not appreciate their sole responsibility on the executed projects, and instead thought of themselves as mere recipients of the development aid. Furthermore, it was revealed that community members had a passive participation in the project cycle management as a significant number of people were only involved during the project implementation phase. All these findings suggest that sustainability of the projects implemented in these two villages is questionable. Following these observations, the study recommends that community members should be involved in all phases of the project cycle management especially during the design stage so that they may own projects and develop a feeling of ownership over the project in question. In addition it has been advised that project officer should make sure that non-profit making projects be designed in such a way that that they promote community sensitivity to finance such projects.