The International Monetary Fund has disclosed that the Federal Government failed to capture public expenditure equivalent to about two per cent of Nigeria’s Gross Domestic Product in recent national budgets, creating a gap between the country’s reported fiscal deficit and its actual financing needs.
The IMF Resident Representative in Nigeria, Christian Ebeke, made the disclosure on Wednesday during a meeting with business executives in Lagos.
According to him, the omission made Nigeria’s fiscal deficit appear lower than the government’s real borrowing requirement, as some capital expenditure was not captured in budget documents and implementation reports.
“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,” Ebeke said.
Findings indicate that Nigeria’s nominal GDP in 2025 stood at about ₦441.5 trillion, with government expenditure accounting for approximately 11.73 per cent of GDP.
However, an estimated ₦8.83 trillion in public spending, representing about two per cent of GDP, was allegedly not recorded in official budgets, thereby distorting the country’s actual fiscal deficit and borrowing needs.
Ebeke explained that the unreported expenditure was largely linked to major government projects executed outside the formal budget framework.
He said such off-budget spending makes it difficult to accurately assess Nigeria’s fiscal position and the true scale of public investment.
The IMF official noted that incomplete fiscal reporting also complicates coordination between fiscal and monetary authorities, as policymakers may be making decisions without a full picture of government financing obligations.
He said Nigerian authorities had started addressing the gap by revising budget legislation to accommodate previously unrecorded expenditure.
However, Ebeke stressed that updated budget implementation reports would still be required to fully reflect the changes and eliminate the statistical discrepancy.
He emphasised that greater fiscal transparency is necessary to strengthen public financial management, warning that off-budget spending raises concerns over procurement practices, accountability and legislative oversight.
His remarks come shortly after the IMF’s latest Article IV consultation on Nigeria, in which the Fund commended the Federal Government’s macroeconomic reforms for improving economic stability and boosting investor confidence.
The IMF, however, warned that while the reforms had helped stabilise the economy, they had yet to translate into broad-based improvements in living standards.
The Fund also cautioned that Nigeria’s economy remains exposed to external shocks, including global oil market volatility and geopolitical tensions arising from the ongoing conflict in the Middle East.
The disclosure is expected to intensify debate over Nigeria’s fiscal transparency, public debt management and the need for stricter reporting of government expenditure within the national budget framework.
