IMF: Nigeria spent 2% of GDP outside budget – THIS UPDATE

By Ayo Kehinde

The International Monetary Fund (IMF) has revealed that Nigeria has recorded government spending equivalent to around 2% of its gross domestic product (GDP) outside of recent official budgets.

He noted that the anomaly created a gap between the country’s reported fiscal deficit and its actual financing needs.

IMF Resident Representative to Nigeria, Christian Ebeke, disclosed this while addressing business leaders in Lagos on Wednesday.

He explained that the discrepancy made Nigeria’s fiscal deficit appear lower than the level of public debt because some capital expenditure was omitted from budget documents and implementation reports.

According to Ebeke, unreported spending is largely linked to large government projects executed outside the formal budgetary framework, making it difficult to accurately assess the country’s fiscal position and public investment.

“So far, we believe that around 2% of GDP of expenditures have been unreported and should be properly recorded so that this statistical discrepancy disappears,” he said.

Ebeke noted that incomplete fiscal reporting also complicates coordination between fiscal and monetary authorities, as policymakers may not have a clear picture of the government’s true deficit and financing needs.

However, he said the Nigerian government has begun to address the issue by repealing and revising recent budget laws to capture previously unreported expenditure, although updated budget implementation reporting is still needed to improve transparency.

The IMF official stressed that greater fiscal transparency is essential, warning that off-budget spending raises concerns about procurement practices, accountability and oversight.

In its latest Article IV consultation on Nigeria, the IMF praised the government’s far-reaching economic reforms, saying they have improved macroeconomic stability and boosted investor confidence.

However, the Fund warned that the gains have yet to translate into large-scale benefits for millions of Nigerians and remain vulnerable to external shocks, including the ongoing conflict in the Middle East.

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