Billions unaccounted for in Nigeria’s books as IMF flags data gaps

Nigeria is struggling to account for billions of dollars in its official trade and financial flows, raising questions about the reliability of government data as authorities seek to rebuild economic confidence.

In its latest Balance of Payments report released in April, the Central Bank of Nigeria said net errors and omissions in Nigeria’s balance of payments was $5 billion in 2024, a huge narrowing from nearly $25 billion (or 7% of gross domestic product) in the previous year.

The International Monetary Fund (IMF) said in its July review of the Nigerian economy that at $5 billion, or 3% of GDP, net errors and omissions in Nigeria’s balance of payments remained a major concern.

“The magnitude of net errors and omissions continues to constrain the external sector assessment for Nigeria,” the IMF said in its Article IV report. The unaccounted flows, it added, complicate efforts to monitor risks and design sound policy.

Net errors and omissions arise when inflows and outflows recorded in a country’s external accounts don’t match. In theory, each transaction should have an offsetting entry. For example, a foreign investment inflow matched by the acquisition of assets. When those links are missing, the gap shows up as an error, exposing weaknesses in how a country tracks economic dealings with the world.

The central bank said in an earlier statement that the decline in the 2024 figure showed “substantial improvements in data availability and capture.”

“This represents a major advance in data accuracy, transparency, and overall reporting integrity,” it said.

Where is the money?

Neither the CBN nor the IMF stated the sources of the large errors, but economists cite factors such as unrecorded capital flight (that is individuals and firms move funds abroad without going through official channels), and informal trade with neighbouring countries that bypasses customs and banking systems. Poor coordination among government agencies and outdated data systems also contribute to the gaps.

Nigeria’s largest recent discrepancies were recorded in 2015 and 2022, including a $20.7 billion gap in 2015.

President Bola Tinubu’s government has pushed reforms to attract foreign investment, scrapping fuel subsidies and floating the naira to unify exchange rates. But experts say large errors and omissions risk undermining these efforts, as investors rely on credible data to assess the economy.

Despite pledges of $50.8 billion from Tinubu’s investment drives, foreign direct investment fell nearly 20% in the first quarter of 2025, according to central bank data.

“Data shortcomings are somewhat hampering surveillance (Annex IX). Inconsistency of fiscal data across government entities and limited coverage and granularity hamper an accurate and timely assessment of the fiscal position. Large errors and omissions, and delays in publishing balance of payments data complicate external stability analysis,” the IMF said.

The Fund also highlighted issues with other statistics, including inflation and GDP data. It acknowledged Nigeria’s rebasing of the consumer price index to reflect updated consumption patterns, but said concerns remain over the clarity of the process. Inflation was reported at 33.7% in April 2025, though actual price pressures may be higher for many households.

Nigeria is also updating its GDP base year, a move that could significantly alter growth figures.

What’s at stake

Large errors hinder the central bank’s ability to gauge real foreign currency flows, complicating exchange rate management at a time when the naira has lost over 70% of its value since mid-2022. They also make fiscal planning harder, clouding trade and capital flow assessments.

“Delays in publishing financial soundness indicators constrain the assessment of financial conditions and risks. Complete publication of the rebased CPI data has been delayed, and setting December as the index reference period rather than using an annual index reference period inhibits the assessment of the inflation level and trend,” the IMF said.

The government, the IMF noted, recognizes these challenges and is working with partners to improve data systems, though progress has been slow.