The International Monetary Fund (IMF) says Nigeria’s recent federal budgets omit public spending equivalent to about 2% of gross domestic product (GDP), creating a mismatch between the fiscal deficit reported in budget documents and the country’s actual borrowing and financing needs. The IMF’s Nigeria resident representative, speaking in Lagos, attributes the discrepancy to capital expenditure that is excluded from some budget and implementation reporting, including work carried out through “off-budget” channels. As a result, the fiscal deficit can appear smaller than the financing requirements implied by real government spending and investment. The IMF says incomplete fiscal reporting also makes it harder to coordinate fiscal and monetary policy because policymakers may lack a full picture of financing needs. The fund adds that off-budget spending raises concerns about procurement practices, accountability and oversight. In response, Nigerian authorities have begun efforts to correct the record by repealing and revising recent budget laws to incorporate previously unreported expenditure, though the IMF says updated budget implementation reports are still needed to fully reflect the changes. The IMF also notes that recent macroeconomic reforms have improved stability and investor confidence, but emphasizes the importance of improving transparency to sustain progress.
IMF says Nigeria’s budgets omit spending equal to about 2% of GDP
The International Monetary Fund (IMF) says Nigeria’s recent federal budgets omit public spending equivalent to about 2% of gross domestic product (GDP), creating a mismatch between the fiscal deficit...
- The IMF says Nigeria’s recent budgets omit public spending estimated at about 2% of GDP.
- The omission creates a gap between the reported fiscal deficit and Nigeria’s actual financing needs.
- The IMF links some unrecorded spending to off-budget or excluded capital expenditure.
- Improved fiscal transparency and updated budget implementation reporting are cited as necessary to close the discrepancy.
- Nigeria is reported to be revising budget laws to incorporate previously unrecorded expenditure.
By Yinka Kolawole, with agency report 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 […] The post FG omitted N8.8trn spending worth 2% of GDP from recent budgets — IMF appeared first on Vanguard News.
1 month agoThe IMF reveals Nigeria’s budgets hide a 2% GDP fiscal gap due to unrecorded spending, urging transparency and legislative reforms to address the issue. Read More: https://punchng.com/imf-flags-fiscal-gap-in-nigerias-budgets/
1 month agoThe International Monetary Fund (IMF) says Nigeria failed to record public spending equivalent to about 2 percent of its gross domestic product (GDP) in recent official budgets, creating a gap between its reported fiscal deficit and actual financing needs. Christian Ebeke, the IMF’s resident representative in Nigeria, spoke on Wednesday at a meeting with business executives in Lagos. Ebeke said the discrepancy means Nigeria’s fiscal deficit appears smaller than the government’s actual borrowing needs because some capital expenditure was excluded from budget documents and implementation reports. He said the unreported spending was linked, in part, to large government projects executed off-budget, making it more difficult to accurately assess the country’s fiscal position and public investment levels. “So far we think that there are about 2% 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 added that incomplete fiscal reporting also complicates coordination between fiscal and monetary authorities because policymakers may not have a full picture of the government’s true financing requirements. According to Ebeke, Nigerian authorities have started addressing the issue by repealing and revising recent budget laws to incorporate previously unrecorded expenditure. However, he said updated budget implementation reports are still required to fully reflect the changes. The IMF official stressed that improving fiscal transparency is essential, warning that off-budget spending raises concerns about procurement processes, accountability and oversight. Ebeke’s comments come after the IMF, in its latest Article IV consultation on Nigeria, commended the federal government’s recent macroeconomic reforms, saying they had strengthened economic stability and improved investor confidence. The fund, however, warned that the gains from the reforms had yet to translate into broad-based improvements in living standards and could be threatened by external shocks, including the conflict in the Middle East.
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