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LAGOS, July 1 (Reuters) — The International Monetary Fund (IMF) said Nigeria has public spending equivalent to about 2% of GDP that has not been recorded in recent official budgets, creating a gap between the reported fiscal deficit and actual financing needs. IMF Resident Representative Christian Ebeke said some capital expenditure linked to major government projects was carried out off-budget, distorting assessments of Nigeria’s fiscal position and public investment. He said around 2% of GDP in expenditure should be properly reported so that the statistical discrepancy disappears. 

The IMF noted that incomplete reporting complicates coordination between fiscal and monetary policy because policymakers may not have a full picture of the government's true deficit. 

 According to Ebeke, Nigerian authorities have begun revising budget laws to incorporate previously unrecorded spending, although updated implementation reports are still required. 

 The IMF also stressed that improving fiscal transparency is essential, noting that off-budget spending raises concerns about procurement, oversight and accountability. In its latest Article IV review, the IMF praised Nigeria's economic reforms for strengthening macroeconomic stability and investor confidence, while warning that the benefits have yet to reach many citizens and remain vulnerable to external shocks, including tensions in the Middle East. Reporting by MacDonald Dzirutwe; Editing by Chijioke Ohuocha and William Maclean.