IMF raises concerns over unrecorded spending in Nigeria’s recent fiscal accounts

The International Monetary Fund (IMF) has raised concerns over significant gaps in Nigeria's recent fiscal accounts, highlighting unrecorded public spending equivalent to approximately 2% of the country's Gross Domestic Product (GDP). This spending has not been captured in official budgets, creating a mismatch between the reported fiscal deficit and the government's actual financing requirements. Christian Ebeke, the IMF's Resident Representative in Nigeria, stated that this omission means the fiscal deficit appears lower than it truly is, as certain government capital expenditures were absent from both budget documents and implementation reports.

Ebeke explained that part of this unreported expenditure is linked to major government projects executed outside the formal budget framework. This lack of transparency complicates accurate assessment of the nation's fiscal position and the true scale of public investment. The IMF official warned that incomplete fiscal reporting hinders effective economic management, particularly the coordination between fiscal and monetary authorities, as policymakers may be operating without a complete understanding of the government's financing needs.

Despite these concerns, the Nigerian government has initiated corrective measures, including revising and repealing recent budget laws to incorporate previously omitted spending. However, Ebeke emphasized that the process is ongoing and requires updated budget implementation reports to fully reflect these changes. The IMF stressed that enhanced fiscal transparency is vital for strengthening public financial management, noting that off-budget spending raises questions about procurement procedures, accountability, and institutional oversight. These remarks follow the IMF's recent Article IV consultation, which acknowledged Nigeria's macroeconomic reforms for improving economic stability and investor confidence, while cautioning that these reforms have yet to translate into widespread improvements in living standards.

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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.