The International Monetary Fund (IMF) has warned that persistent gaps between government budget promises and actual fiscal outcomes are weakening economic management across sub-Saharan Africa, just as countries in the region contend with tighter financing conditions, rising debt burdens and mounting global uncertainty.
In a new departmental paper, the IMF said governments across the region are increasingly struggling to deliver budgets that align with approved plans, a trend that is eroding fiscal credibility and undermining confidence among citizens, investors and development partners.
According to the report, fiscal deficits in many countries are routinely larger than initially budgeted, driven by overly optimistic revenue forecasts, underestimation of interest costs and overspending on recurrent expenditures such as wages, transfers, and government operations.
The paper, based on a newly compiled dataset covering 39 sub-Saharan African countries between 2021 and 2024, found that deviations between budget plans and actual outcomes are not isolated events but a recurring pattern.
While current spending often exceeds budget targets, capital expenditure is frequently cut when revenues fall short or grants are delayed. This means investments in roads, schools, hospitals and other infrastructure are often postponed or scaled back to accommodate fiscal pressures.
The IMF said this pattern is particularly concerning in a region where infrastructure deficits remain large and development needs continue to outpace available resources.
“Budgets people can trust—because spending and revenues stay close to what was promised—are critical to delivering better economic outcomes,” the IMF noted.
The Fund explained that when governments repeatedly miss their fiscal targets, policy credibility weakens, uncertainty rises and trust in public institutions declines.
The challenge comes at a difficult time for the region. Many countries are facing declining foreign aid, high debt servicing costs, low domestic revenue mobilisation and repeated shocks ranging from commodity price volatility to climate-related disasters.
According to the IMF, these pressures make credible budgeting more important than ever because reliable fiscal plans help anchor investor expectations, preserve macroeconomic stability and support long-term development.
The report also found that budget deviations are often rooted in structural and institutional weaknesses rather than temporary forecasting errors or unforeseen shocks.
Countries with stronger fiscal frameworks including expenditure rules, independent fiscal councils and robust oversight institutions—tend to record smaller gaps between budget plans and outcomes.
Similarly, nations operating under IMF-supported programmes generally experience fewer fiscal slippages, suggesting that policy conditionality and external monitoring can help strengthen discipline.
By contrast, low-income and fragile states typically experience larger budget deviations, reflecting weaker institutions, capacity constraints and more volatile financing environments.
The IMF also noted that political pressures often intensify in election years, when governments tend to loosen spending controls, resulting in wider fiscal gaps.
On the ground, the consequences of weak budget credibility are visible in delayed infrastructure projects, deteriorating public services and increased borrowing needs.
When governments are unable to rein in recurrent spending, they often accumulate arrears or resort to unplanned borrowing, adding to fiscal vulnerabilities and constraining future policy choices.
To address these challenges, the IMF urged governments to adopt more realistic revenue assumptions, strengthen top-down budgeting and enforce binding expenditure ceilings.
It also recommended tighter controls over spending commitments, improved project appraisal and cash-flow planning to protect capital expenditure from in-year cuts.
Other policy priorities include stronger fiscal rules, more effective legislative oversight, restrictions on excessive reallocations during election periods and better coordination between governments and development partners.
The paper was authored by Pablo Lopez Murphy, Can Sever, Félix F. Simione and Qianqian Zhang.
The IMF said that while perfect budget execution may be unrealistic in an era of frequent shocks, governments must ensure that fiscal slippages do not become the norm.
For sub-Saharan Africa, where public resources are scarce and development needs remain substantial, the Fund said budgets that closely reflect reality are essential for maintaining economic stability and restoring public trust.
