ABUJA, July 2 – The International Monetary Fund (IMF) says Nigeria did not capture public spending worth about 2% of its Gross Domestic Product (GDP) in recent national budgets, leaving a gap between the country’s reported fiscal deficit and its actual financing needs.
Speaking at a meeting with business executives in Lagos, IMF Resident Representative Christian Ebeke said some government spending, particularly on major capital projects, was carried out outside the official budget framework.
According to him, the missing expenditure makes Nigeria’s budget deficit appear lower than the amount the government actually needs to finance.
“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,” Ebeke said.
He explained that incomplete reporting makes it harder to assess the country’s true fiscal position and also affects coordination between fiscal and monetary authorities, since policymakers may not be working with a complete picture of government finances.
The IMF said Nigerian authorities have started reviewing recent budget laws to include previously unrecorded spending, although updated budget implementation reports are still needed.
The Fund noted that recording all public expenditure would remove the statistical gap between the reported fiscal deficit and the government’s actual borrowing requirement. It also said stronger budget reporting would improve transparency, strengthen public accountability and give a clearer picture of public investment.
In its latest Article IV Consultation, the IMF acknowledged Nigeria’s recent economic reforms, including the removal of fuel subsidies and the liberalisation of the foreign exchange market, saying they have supported macroeconomic stability and improved investor confidence.
However, the Fund said the gains have yet to translate into broader improvements in living standards. It also cautioned Nigeria over its proposed plan to raise up to $5 billion through a derivatives based financing arrangement with First Abu Dhabi Bank, noting that such transactions can be complex and less transparent.
