Nigeria had about 2% of GDP worth of public spending not recorded in recent official budgets, creating a gap between its reported deficit and actual financing needs, IMF resident representative in Nigeria Christian Ebeke said on Wednesday.
The discrepancy means the country’s fiscal deficit appears smaller than the level of borrowing, because some capital spending was not included in budget documents or implementation reports.
These unreported expenditures are linked in part to large government projects carried out off-budget, distorting assessments of Nigeria’s fiscal stance and public investment levels, Ebeke told business executives in Lagos.
“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,” said Ebeke.
The lack of full reporting can also complicate coordination between fiscal and monetary policy, as policymakers may not have a clear picture of the true deficit, he added.
Ebeke said Nigerian authorities have begun addressing the issue by repealing and revising recent budget laws to incorporate previously unrecorded spending, though updated implementation reports are still needed.
In its latest Article IV review, the IMF praised Nigeria’s sweeping reforms, saying they had strengthened economic stability and investor confidence, but warned that the benefits had yet to reach millions of citizens and could be undermined by global shocks, including the Middle East conflict.
REUTERS
