By Waziri Adio

In a vibrant swirl of numbers and plans, Nigeria’s federal budgets over the years have become less about economic reality and more about a structured charade. A recent paper by the International Monetary Fund (IMF) has peeled back the polished veneer of these fiscal forecasts, exposing a carefully crafted facade that misleads both internally and to the world at large.

The IMF’s Revelations

The IMF has confirmed what many in Nigeria suspected: the nation’s budget forecasts, especially regarding revenue and expenditures, consistently fail to match actual economic outcomes. These frequent discrepancies are not mere oversights but rather, intentional designs. There is logic woven into what might appear as fiscal chaos. This strategy, spanning administrations, serves purposes beyond straightforward economic planning.

A System of ‘Optimism Bias’

As the IMF’s study of Nigeria’s fiscal practices points out, our revenue forecasts—particularly in the oil sector—continue to be overly optimistic. Despite the natural volatility and declining performance in oil revenues, officials persistently predict revenues higher than historical trends suggest. Such illusions extend to expenditure forecasts, with capital expenditures regularly falling short by a staggering average of 70%.

The Double-edged Strategy

Why do these errors persist? Primarily, the forecasts are designed to present an image of a thriving and robust economic situation—an “optimism bias.” Consider recent budgets: the leap from N28.7 trillion in 2024 to a proposed N54.99 trillion for 2025 isn’t mere imprudence but a strategy to disguise mounting debts and expenses, while placating political pressures.

The Theatre of Political Economics

The intentional overestimations in budgets have deeper roots in Nigeria’s political structure. In a system driven by patronage, these forecasts help navigate power dynamics between the legislature and the executive. Both branches benefit: legislators can appease their constituencies with grand budget inclusions, while the executive manages resources selectively—an intricate dance of faux abundance and circumspect reality.

Beyond Technical Fixes

While the IMF acknowledges the need for political commitment to realistic budgeting, it underestimates the entrenched political and adaptive elements that perpetuate this cycle. A technical approach may not suffice; change requires dismantling the well-served motivations driving these “bogus” forecasts.

Uncertainties in Nigeria’s official numbers are part of an elaborate fiscal play—one that the IMF, and indeed us as citizens, must push to transform into genuine financial accountability. As stated in thisdaylive, understanding the political and adaptive dimensions is as crucial as any technical recommendations in addressing these issues effectively.