The study, covering 39 countries between 2021 and 2024, finds that deviations from approved budgets are not occasional events but structural features of public finance across the region. Rather than reflecting isolated forecasting errors, the analysis highlights deeper institutional weaknesses that shape how budgets are designed and implemented.

The paper shows that fiscal deficits regularly exceed initial plans, largely due to two recurring factors: overly optimistic revenue forecasts and overspending on current expenditure.

Governments frequently overestimate tax income and grant inflows, then struggle to meet those targets once the fiscal year begins. At the same time, spending on wages, goods, services, and transfers tends to exceed approved limits. The study finds that these overruns often increase during periods of higher-than-expected revenue, reflecting weak expenditure controls and a tendency toward procyclical spending.

Interest payments also emerge as a consistent source of underestimation, adding further pressure to already stretched budgets.

While current spending rises above target, capital expenditure follows the opposite pattern. Investment in infrastructure, such as roads, schools, and health facilities, is frequently reduced or delayed when revenues fall short or financing gaps emerge.

The study identifies this trend as a major concern, particularly in a region where development needs remain high. In practice, capital spending becomes the primary adjustment tool during fiscal stress, leading to visible outcomes such as unfinished projects, weakened service delivery, and slower economic transformation.

The IMF analysis shifts the focus from headline budget slippages to their underlying composition. Identical deficit overruns can stem from very different causes, including weak revenue planning, spending rigidities, or institutional shortcomings.

The findings challenge a common view among policymakers that budget deviations are mainly driven by unforeseen shocks or technical errors. Instead, the study argues that structural and institutional constraints, including weak fiscal frameworks and limited enforcement mechanisms, play a dominant role.

The strength of fiscal institutions emerges as a key differentiator. Countries with clearer fiscal rules and stronger oversight mechanisms tend to show smaller deviations, while low-income or fragile states experience larger and more persistent gaps.

The question of budget credibility is becoming more urgent in the current global context. Governments in sub-Saharan Africa face declining external aid, rising debt burdens, and increasing exposure to shocks such as climate events, pandemics, and commodity price volatility.

In this environment, budgets serve as core policy instruments that signal fiscal intent and guide resource allocation. When these commitments are repeatedly missed, confidence among citizens, investors, and development partners erodes, making it harder to mobilise financing and stabilise economies.

The study warns that weak credibility contributes to a cycle of uncertainty, leading to higher borrowing needs, accumulation of arrears, and growing fiscal vulnerabilities.

Budget slippages translate directly into everyday outcomes. When governments struggle to meet revenue targets but cannot reduce politically sensitive current expenditure, investment is often cut back.

This results in delayed infrastructure, reduced service quality in health and education, and limited progress in expanding utilities. At the same time, excess current spending can increase debt and create new financing pressures, reinforcing long-term fiscal risks.

The IMF outlines a set of practical policy steps aimed at restoring budget credibility:

• Realistic revenue planning, grounded in recent performance and credible macroeconomic assumptions
• Stronger top-down budgeting, with enforceable expenditure ceilings
• Improved spending controls, including tighter commitment and payment systems
• Protection of capital investment, using better project appraisal and execution safeguards
• Enhanced fiscal institutions, including fiscal rules and independent oversight bodies
• Greater transparency and discipline during election cycles, when fiscal slippages tend to widen

The study also highlights the role of IMF-supported programmes in helping countries maintain fiscal discipline through policy anchors and monitoring frameworks.

The analysis concludes that improving budget credibility is not about achieving perfect execution, but about preventing deviations from becoming the norm.

With economic uncertainty set to persist, the IMF argues that credible budgets will remain a central pillar of macroeconomic stability and long-term development across sub-Saharan Africa.

–IMF/ChannelAfrica–