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• Urges greater fiscal transparency
The International Monetary Fund (IMF) has raised concerns that Nigeria’s public finance wing may be underreporting government spending equivalent to about two per cent of the country’s Gross Domestic Product (GDP).
The fund, while calling for better fiscal transparency, warned that the gap distorts the country’s true fiscal position and complicates economic policymaking.
Speaking at a meeting with business executives in Lagos yesterday, IMF Resident Representative in Nigeria, Christian Ebeke, disclosed that some public expenditures, particularly capital projects executed outside the formal budget process, were not reflected in recent budget documents or implementation reports.
According to him, the omission creates a statistical discrepancy between Nigeria’s reported fiscal deficit and its actual financing requirements, making the deficit appear smaller than the level of government borrowing.
“So far we think that there are about two per cent of GDP of expenditure not reported that should be reported and should be recorded, so that this statistical discrepancy will disappear,” Ebeke said.
He explained that the unreported expenditures are partly tied to large government projects undertaken off-budget, making it difficult to accurately assess the country’s fiscal stance and the true level of public investment.
He warned that the lack of comprehensive reporting also poses challenges for economic management, particularly in coordinating fiscal and monetary policies.
“The lack of full reporting can also complicate coordination between fiscal and monetary policy, as policymakers may not have a clear picture of the true deficit,” he said.
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The IMF official noted that the Nigerian government has begun taking steps to address the issue by repealing and revising recent budget laws to incorporate previously omitted expenditures.
However, he stressed that updated budget implementation reports are still required to ensure that all government spending is properly captured and reflected in official fiscal data.
He also underscored the importance of improving transparency and accountability in public finance management, warning that off-budget spending raises concerns about procurement processes, oversight and public accountability.
Ebeke’s remarks come amid ongoing reforms by the Federal Government aimed at restoring fiscal discipline, improving revenue generation and strengthening public financial management.
In its latest Article IV Consultation report, the IMF commended Nigeria’s recent macroeconomic reforms, saying they had helped stabilise the economy, strengthen investor confidence and improve key economic indicators.
However, the Fund cautioned that the gains from the reforms have yet to translate into meaningful improvements in the living conditions of many Nigerians.
It also warned that the country’s economic recovery remains vulnerable to external risks, including heightened geopolitical tensions and the ongoing conflict in the Middle East, which could trigger fresh inflationary pressures and disrupt global markets.
The IMF urged the authorities to sustain reforms while improving fiscal transparency to provide investors, policymakers and the public with a more accurate picture of Nigeria’s public finances and support stronger economic decision-making.
