The International Monetary Fund (IMF) has said Nigeria failed to report public expenditure equivalent to about 2 per cent of its Gross Domestic Product (GDP) in recent budgets, understating the country’s true fiscal deficit and masking the actual level of government borrowing.
The IMF Resident Representative in Nigeria, Christian Ebeke, disclosed this during a business forum in Lagos on Wednesday.
According to Ebeke, the unreported expenditure created what he described as a “statistical discrepancy” that distorted the government’s fiscal position.
“So far, we think that there are about two per cent 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.
Ebeke explained that key capital expenditures were excluded from official budget documents and implementation reports, making the Federal Government’s reported fiscal deficit appear smaller than its actual size.
He revealed that the unrecorded spending was largely linked to major infrastructure projects executed outside the formal budget framework.
According to him, bypassing the budget process distorts objective assessments of Nigeria’s fiscal position while concealing the true scale of public investment.
The IMF official also warned that the reporting gap has significant implications for economic management, saying incomplete fiscal data makes it difficult to coordinate fiscal and monetary policies effectively.
He noted that the lack of full disclosure limits the Central Bank’s ability to respond appropriately to economic challenges because policymakers do not have an accurate picture of the country’s fiscal trajectory.
Ebeke acknowledged that the Federal Government has begun taking steps to address the problem by reviewing and amending budget laws to capture previously unreported expenditures.
However, he stressed that the reforms must be supported by timely and updated budget implementation reports to improve transparency and accountability.
He added that off-budget spending raises serious concerns over procurement processes and weak oversight, insisting that eliminating such practices is essential to restoring fiscal discipline and strengthening public financial management.
The comments follow the IMF’s latest Article IV consultation, which commended Nigeria’s recent economic reforms for improving investor confidence while cautioning that structural weaknesses continue to limit the benefits felt by many Nigerians.
