The IMF Departmental Paper Budget Credibility in Sub‑Saharan Africa, published in 2026, analysed budget plans and outcomes in 39 countries between 2021 and 2024. It found that fiscal deficits routinely exceeded original budget targets, primarily due to overly optimistic revenue forecasts and persistent overspending on wages, goods and services.
On average, fiscal deficits deviated from approved budgets by about 1.3% of gross domestic product (GDP), with overspending far more common than underspending. Revenue shortfalls were widespread, particularly regarding donor grants, while governments often responded by cutting capital expenditure during budget execution.
The IMF warned that this adjustment pattern is harmful. “Capital expenditure has become the main adjustment variable when revenues disappoint, or current spending rises,” the report said, noting that this undermines infrastructure investment and long‑term growth in a region with substantial development needs.
The study highlighted a clear link between political cycles and fiscal slippages. Budget deviations tend to widen in the run‑up to elections, as pressure mounts to increase spending, often at the expense of fiscal discipline and credibility.
Despite these challenges, the IMF said stronger institutions make a measurable difference. Countries with fiscal rules, independent fiscal councils and higher Public Expenditure and Financial Accountability scores generally recorded smaller and less volatile gaps between budget plans and outcomes. Participation in IMF‑supported programmes was also associated with improved budget credibility.
With external financing becoming more constrained and debt vulnerabilities remaining elevated, the Fund warned that weak budget credibility amplifies fiscal risks and limits governments’ ability to respond to economic shocks.
To reverse the trend, the IMF urged African governments to adopt more realistic revenue projections, tighten controls over current spending and strengthen cash‑flow management. Protecting capital investment during budget execution is essential to safeguard development priorities, it said.
The report also stressed the importance of transparency and accountability throughout the budget cycle, arguing that restoring credibility is critical to rebuilding public trust and ensuring scarce public resources deliver sustainable economic and social outcomes.
–IMF/ChannelAfrica–
