## Fiscal Forecasting Errors in Nigeria

_Selected Issues Papers, July 11, 2025_

## Source details

**Canonical URL:** [Fiscal Forecasting Errors in Nigeria](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/07/11/fiscal-forecasting-errors-in-nigeria-568555)

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## Bibliographic details
- Authors: Salma Khalid
- Published: July 11, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229017794.018

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### Key Findings
- 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.

### Analysis of Causes
- 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.

### Policy Recommendations
- 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.

### Subject Areas Covered
- Budget execution and treasury management
- Budget planning and preparation
- Expenditure
- Macroeconomic and fiscal forecasts
- Public financial management (PFM)
- Revenue forecasting
- Tax policy

*Source: "Fiscal Forecasting Errors in Nigeria", Salma Khalid, July 11, 2025.*

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## Content in this bundle

- **Fiscal Forecasting Errors in Nigeria; IMF Selected Issues Paper No. 2025/095; July 11, 2025**
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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/07/11/fiscal-forecasting-errors-in-nigeria-568555_