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

The International Monetary Fund (IMF) has expressed concern over gaps in Nigeria’s recent fiscal accounts, saying public spending equivalent to about two per cent of the country’s Gross Domestic Product (GDP) was not captured in official budgets, resulting in a mismatch between the reported fiscal deficit and the government’s actual financing needs.

The IMF’s Resident Representative in Nigeria, Christian Ebeke, disclosed this on Wednesday during a meeting with business executives in Lagos.

According to Ebeke, the omission means Nigeria’s fiscal deficit appears lower than it actually is because some government capital expenditure was neither reflected in budget documents nor included in implementation reports.

“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 said.

He explained that part of the unreported expenditure was tied to major government projects executed outside the formal budget framework, making it difficult to accurately assess the country’s fiscal position and the scale of public investment.

Ebeke also warned that incomplete fiscal reporting complicates economic management, particularly coordination between fiscal and monetary authorities, because policymakers may be working without a full picture of the government’s financing requirements.

He noted, however, that the Nigerian government had begun taking corrective steps by revising and repealing recent budget laws to incorporate previously omitted spending.

According to him, the process is not yet complete, as updated budget implementation reports are still required to accurately reflect the changes.

The IMF official stressed that greater fiscal transparency is critical to strengthening public financial management, warning that off-budget spending raises concerns about procurement procedures, accountability and institutional oversight.

His remarks come shortly after the IMF, in its latest Article IV consultation on Nigeria, acknowledged the federal government’s recent macroeconomic reforms, saying they had contributed to stronger economic stability and improved investor confidence.

Despite those gains, the Fund cautioned that the reforms have yet to produce broad-based improvements in the living standards of Nigerians. It also warned that the country’s economic outlook remains vulnerable to external shocks, including the ongoing conflict in the Middle East, underscoring the need for sustained fiscal discipline and transparent public financial reporting.

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