The International Monetary Fund (IMF) has raised concerns over unreported government spending in Nigeria, saying expenditure equivalent to about two percent of the country’s Gross Domestic Product (GDP) was not captured in recent official budgets and implementation reports.
IMF Resident Representative in Nigeria, Christian Ebeke, disclosed this on Wednesday, while speaking to business executives in Lagos. He said the omission had created a gap between Nigeria’s reported fiscal deficit and its actual financing needs.
According to him, the discrepancy means the country’s deficit appears smaller on paper than the level of borrowing required to fund government activities. He linked part of the unreported spending to major capital projects executed outside the formal budget process.
“So far, we think that there are about two percent of GDP of expenditure that were not reported, that should be reported and should be recorded, so that this statistical discrepancy will disappear,” Ebeke said.
He warned that off-budget spending distorts the true picture of Nigeria’s fiscal position, public investment levels and borrowing requirements. He added that incomplete reporting could also weaken coordination between fiscal and monetary policy, as authorities may not have a clear view of the actual deficit.
Ebeke said Nigerian authorities had started addressing the problem by repealing and revising recent budget laws to include previously unrecorded expenditure. However, he noted that updated budget implementation reports were still needed. The IMF official said improved transparency was critical, warning that off-budget expenditure raises concerns about procurement, oversight and accountability.
The warning comes after the IMF’s latest Article IV review commended Nigeria’s reforms for strengthening economic stability and investor confidence, while cautioning that the benefits had yet to reach millions of citizens and could be undermined by global shocks, including conflict in the Middle-East.
