International records / International Monetary Fund

Fiscal Forecasting Errors in Nigeria

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. Revenues forecasts errors are driven by optimistic budget projections for oil production which consistently exceed actual outturn. Capital expenditures are also subject to systematic optimism bias, with outturn falling short of budget allocations. Large fiscal forecast errors limit the usefulness of the budget in providing a framework for the authorities' fisca…