The International Monetary Fund (IMF) has disclosed that the Federal
Government (FG) failed to capture public expenditure equivalent to about two
per cent of Nigeria’s Gross Domestic Product (GDP) in recent national budgets,
creating a mismatch between the country’s reported fiscal deficit and its actual
financing needs.
IMF’s Resident Representative in Nigeria, Christian Ebeke, made the disclosure
on Wednesday during a meeting with business executives in Lagos.
Findings indicate that in 2025, Nigeria’s nominal GDP was N441.5 trillion.
Government expenditure accounted for approximately 11.73% of this GDP.
However, an additional N8.83 trillion in public spending—equivalent to about
2% of the GDP—was unrecorded in official budgets, distorting the country’s
actual fiscal deficit and borrowing needs
According to Ebeke, the omission has made Nigeria’s fiscal deficit appear lower
than its true borrowing requirement, as some capital expenditure was excluded
from budget documents and implementation reports.
Ebeke explained that the unreported spending was largely tied to major
government projects executed outside the budget framework, making it more
difficult to accurately assess the country’s fiscal position and the scale of public
investment. “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.
He noted that incomplete fiscal reporting also complicates coordination between
fiscal and monetary authorities, as policymakers may be working without a
complete picture of the government’s financing obligations.
The IMF official said the Nigerian authorities had begun addressing the gap by
revising budget legislation to accommodate previously unrecorded expenditure.
However, he stressed that updated budget implementation reports would be
required to fully reflect the changes.
Ebeke emphasised that greater fiscal transparency is critical to strengthening
public financial management, warning that off-budget spending raises concerns
over procurement practices, accountability and oversight.
His remarks come on the heels of the IMF’s latest Article IV consultation on
Nigeria, which commended the Federal Government’s macroeconomic reforms
for improving economic stability and boosting investor confidence.