The International Monetary Fund (IMF) says Nigeria failed to report public spending equivalent to about 2 per cent of its gross domestic product (GDP) in recent official budgets, creating a gap between the country’s reported fiscal deficit and its actual financing needs.
Speaking at a meeting with business executives in Lagos, the IMF’s resident representative in Nigeria, Christian Ebeke, said the discrepancy makes Nigeria’s fiscal deficit appear smaller than the government’s true borrowing requirements.
According to Ebeke, some capital expenditure was excluded from budget documents and implementation reports, with part of the unreported spending linked to major government projects executed outside the formal budget process.
“So far we think that there are about 2% of GDP of expenditure that were not reported that should be reported and should be recorded, so that this statistical discrepancy will disappear,” Ebeke said.
He added that incomplete fiscal reporting makes it more difficult for fiscal and monetary authorities to coordinate effectively because policymakers may not have a complete picture of the government’s financing needs.
Ebeke said Nigerian authorities have begun addressing the issue by repealing and revising recent budget laws to include previously unrecorded expenditure. However, he noted that updated budget implementation reports are still needed to fully reflect the changes.
The IMF official also stressed that greater fiscal transparency is essential, warning that off-budget spending raises concerns about procurement, accountability and oversight.
His remarks follow the IMF’s latest Article IV consultation on Nigeria, which praised the Federal Government’s recent macroeconomic reforms for improving economic stability and boosting investor confidence. However, the Fund warned that these gains have not yet translated into broad improvements in living standards and remain vulnerable to external risks, including the conflict in the Middle East.
