Key facts
- Approximately 2% of Nigeria's GDP in public spending was not officially recorded.
- This unrecorded spending relates to large government projects executed off-budget.
- The discrepancy creates a gap between the reported fiscal deficit and actual financing needs.
- Nigerian authorities are revising budget laws to address the issue.
- Improved transparency is crucial for procurement and oversight.
Nigeria had approximately 2% of its Gross Domestic Product (GDP) in public spending that was not recorded in recent official budgets, creating a gap between its reported deficit and actual financing needs, according to Christian Ebeke, the IMF's resident representative in Nigeria. Ebeke stated that these unreported expenditures, linked in part to large government projects carried out off-budget, distort assessments of Nigeria’s fiscal stance and public investment levels. The lack of full reporting can also complicate coordination between fiscal and monetary policy, as policymakers may lack a clear picture of the true deficit. Nigerian authorities have begun addressing the issue by revising recent budget laws to incorporate previously unrecorded spending, though updated implementation reports are still needed. Ebeke emphasized that improving transparency is critical, as off-budget spending raises concerns about procurement processes and oversight. In its latest Article IV review, the IMF had praised Nigeria's reforms for strengthening economic stability and investor confidence, but cautioned that benefits had yet to reach many citizens and could be undermined by global shocks.