LAGOS, July 1 – The International Monetary Fund (IMF) has stated that Nigeria’s official budgets have omitted public expenditure equivalent to approximately 2% of Gross Domestic Product (GDP), causing the country’s reported fiscal deficit to appear smaller than its actual financing requirements.
The disclosure was made on Wednesday by the IMF’s Resident Representative in Nigeria, Christian Ebeke, during an engagement with business executives in Lagos.
According to the IMF, a portion of government expenditure, particularly spending on major capital projects, has been executed outside the official budget framework, creating a statistical gap between the reported fiscal deficit and the government’s actual borrowing needs.
Explaining the Fund’s assessment, Ebeke said, “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.”
He noted that the omission of off-budget expenditure distorts assessments of Nigeria’s fiscal position and public investment, making it more difficult for policymakers to accurately evaluate government finances.
Ebeke further explained that incomplete fiscal reporting complicates coordination between fiscal and monetary authorities because policymakers may not have a comprehensive picture of the country’s true budget deficit and financing needs.
According to him, Nigerian authorities have already begun addressing the issue by reviewing and revising recent budget laws to incorporate previously unrecorded expenditure. However, he emphasised that updated budget implementation reports remain necessary to provide a complete account of government spending.
The IMF also stressed that improving fiscal transparency is essential for strengthening public accountability, noting that off-budget expenditure can raise concerns about procurement processes and oversight of public funds.
The Fund said comprehensive budget reporting would improve the credibility of Nigeria’s public finances by eliminating the statistical discrepancy between reported fiscal deficits and actual financing requirements. It added that more transparent reporting would strengthen fiscal oversight, improve coordination between monetary and fiscal authorities, and provide a clearer basis for assessing the effectiveness of public investment.
The IMF’s findings suggest that Nigeria’s fiscal deficit may be materially understated when compared with the government’s true financing needs, underscoring the importance of fully recording all public expenditures to enhance transparency and support sound economic policymaking.
