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 in Nigeria, Christian Ebeke, made the disclosure on Wednesday during a meeting with business executives in Lagos.
Vanguard Newspaper's findings indicate that in 2025, Nigeria's nominal GDP was N441.5 trillion. Government expenditure accounted for approximately 11.73% of this GDP. However, an additional N8.83 trillion in public spending--equivalent to about 2% of the GDP--was unrecorded in official budgets, distorting the country's actual fiscal deficit and borrowing needs
According to Ebeke, the omission has made Nigeria's fiscal deficit appear lower than its true borrowing requirement, as some capital expenditure was excluded from budget documents and implementation reports.
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Ebeke explained that the unreported spending was largely tied to major government projects executed outside the budget framework, making it more difficult to accurately assess the country's fiscal position and the scale of public investment.
"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," he said.
He noted that incomplete fiscal reporting also complicates coordination between fiscal and monetary authorities, as policymakers may be working without a complete picture of the government's financing obligations.
The IMF official said the Nigerian authorities had begun addressing the gap by revising budget legislation to accommodate previously unrecorded expenditure. However, he stressed that updated budget implementation reports would be required to fully reflect the changes.
Ebeke emphasised that greater fiscal transparency is critical to strengthening public financial management, warning that off-budget spending raises concerns over procurement practices, accountability and oversight.
His remarks come on the heels of the IMF's latest Article IV consultation on Nigeria, which commended the Federal Government's macroeconomic reforms for improving economic stability and boosting investor confidence.
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The Fund, however, cautioned that while the reforms have stabilised the economy, they are yet to deliver broad-based improvements in living standards and remain vulnerable to external shocks, including the ongoing conflict in the Middle East.
