{
  "title": "Fiscal Forecasting Errors in Nigeria",
  "publication": "Selected Issues Papers, July 11, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2025/07/11/fiscal-forecasting-errors-in-nigeria-568555",
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  "summary": "The Ministry of Budget and Economic Planning's budget implementation reports reveal large fiscal forecast errors over the 2011-2023 period, for a range of fiscal aggregates including total revenues, expenditures, and the fiscal deficit.",
  "sections": [
    {
      "heading": "Key Findings",
      "content": "- Large fiscal forecast errors occurred over the 2011-2023 period for a range of fiscal aggregates including total revenues, expenditures, and the fiscal deficit.\n- Revenue forecast errors are driven by optimistic budget projections for oil production which consistently exceed actual outturn.\n- Capital expenditures exhibit systematic optimism bias, with outturn falling short of budget allocations.\n- Large fiscal forecast errors limit the usefulness of the budget as a framework for the authorities' fiscal policy intentions."
    },
    {
      "heading": "Analysis of Causes",
      "content": "- Optimistic budget projections for oil production underpin recurring overestimation of revenues.\n- Systematic optimism in capital spending allocations leads to persistent under-execution of capital outlays.\n- Weaknesses in forecasting capacity and incentive structures reduce the accuracy and credibility of budget projections."
    },
    {
      "heading": "Policy Recommendations",
      "content": "- Enhance the capacity of the macro-fiscal unit responsible for forecasting.\n- Publish internal and external forecast performance reviews to increase transparency and accountability.\n- Strengthen political commitment to budget targets to improve adherence and credibility.\n- By improving forecast quality, the budget can better serve as a credible guide to fiscal policy in Nigeria."
    },
    {
      "heading": "Subject Areas Covered",
      "content": "- Budget execution and treasury management\n- Budget planning and preparation\n- Expenditure\n- Macroeconomic and fiscal forecasts\n- Public financial management (PFM)\n- Revenue forecasting\n- Tax policy\n\nSource: \"Fiscal Forecasting Errors in Nigeria\", Salma Khalid, July 11, 2025.\n\n---\n\n Content in this bundle\n\n- Fiscal Forecasting Errors in Nigeria; IMF Selected Issues Paper No. 2025/095; July 11, 2025\n  - Fiscal Forecasting Errors in Nigeria; IMF Selected Issues Paper No. 2025/095; July 11, 2025 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Fiscal Forecasting Errors in Nigeria; IMF Selected Issues Paper No. 2025/095; July 11, 2025 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/07/11/fiscal-forecasting-errors-in-nigeria-568555"
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    "Authors: Salma Khalid",
    "Published: July 11, 2025",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229017794.018",
    "Large fiscal forecast errors occurred over the 2011-2023 period for a range of fiscal aggregates including total revenues, expenditures, and the fiscal deficit.",
    "Revenue forecast errors are driven by optimistic budget projections for oil production which consistently exceed actual outturn.",
    "Capital expenditures exhibit systematic optimism bias, with outturn falling short of budget allocations.",
    "Large fiscal forecast errors limit the usefulness of the budget as a framework for the authorities' fiscal policy intentions.",
    "Optimistic budget projections for oil production underpin recurring overestimation of revenues.",
    "Systematic optimism in capital spending allocations leads to persistent under-execution of capital outlays.",
    "Weaknesses in forecasting capacity and incentive structures reduce the accuracy and credibility of budget projections.",
    "Enhance the capacity of the macro-fiscal unit responsible for forecasting.",
    "Publish internal and external forecast performance reviews to increase transparency and accountability.",
    "Strengthen political commitment to budget targets to improve adherence and credibility.",
    "By improving forecast quality, the budget can better serve as a credible guide to fiscal policy in Nigeria.",
    "Budget execution and treasury management",
    "Budget planning and preparation",
    "Expenditure",
    "Macroeconomic and fiscal forecasts",
    "Public financial management (PFM)",
    "Revenue forecasting",
    "Tax policy",
    "**Fiscal Forecasting Errors in Nigeria; IMF Selected Issues Paper No. 2025/095; July 11, 2025**"
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