Nigeria’s unreported public spending hits 2% of GDP, IMF warns
By Aboki Forex —
The International Monetary Fund (IMF) has revealed that Nigeria has public spending equivalent to about 2% of GDP that was not recorded in recent official budgets. This creates a gap between the reported fiscal deficit and the government’s actual financing needs.
IMF Resident Representative Christian Ebeke said some capital expenditure linked to major government projects was carried out off-budget. This distorts assessments of Nigeria’s fiscal position and public investment.
Off-budget spending and the statistical gap
Ebeke stated that around 2% of GDP in expenditure should be properly reported so that the statistical discrepancy disappears. The IMF noted that incomplete reporting complicates coordination between fiscal and monetary policy. Policymakers may not have a full picture of the government’s true deficit.
According to Ebeke, Nigerian authorities have begun revising budget laws to incorporate previously unrecorded spending. However, updated implementation reports are still required.
Transparency concerns and oversight risks
The IMF stressed that improving fiscal transparency is essential. Off-budget spending raises concerns about procurement, oversight, and accountability. In its latest Article IV review, the IMF praised Nigeria’s economic reforms for strengthening macroeconomic stability and investor confidence.
At the same time, the IMF warned that the benefits of these reforms have yet to reach many citizens. The gains remain vulnerable to external shocks, including tensions in the Middle East.
What this means for the naira and Nigerian businesses
Unreported spending distorts the true size of the government’s deficit, which can undermine investor confidence and put pressure on the naira. For Nigerian businesses, unclear fiscal data makes it harder to plan for policy changes, interest rates, and exchange rate movements. Greater transparency could help stabilise the economy and improve the business environment.