Across much of sub-Saharan Africa, national budgets are increasingly becoming statements of ambition rather than reliable fiscal roadmaps.
Governments announce spending plans, revenue targets and deficit projections at the start of each fiscal year, only for actual outcomes to diverge sharply months later. Roads planned in budgets remain unfinished, capital projects stall midway, spending overruns widen deficits, and governments are forced into additional borrowing to plug financing gaps.
A new International Monetary Fund (IMF) departmental paper argues that these persistent gaps between what governments promise and what they ultimately deliver are now becoming a major threat to fiscal credibility, macroeconomic stability and long-term development across the region.
The study, authored by IMF economists Pablo Lopez Murphy, Can Sever, Félix F. Simione and Qianqian Zhang, examined fiscal performance across 39 sub-Saharan African countries between 2021 and 2024 and found that budget deviations are no longer isolated events but deeply entrenched structural problems.
At the centre of the issue lies a simple but critical concern: governments are increasingly struggling to make budgets people can trust.
Budgets That Drift Away From Reality
The paper found that fiscal deficits across the region are frequently larger than governments initially project in approved budgets.
The main reason, according to the study, is a recurring pattern of overly optimistic revenue assumptions combined with spending overruns, particularly on recurrent expenditures such as wages, transfers, and government operations.
Current spending consistently exceeds planned targets and accounts for the bulk of fiscal slippages.
Ironically, the problem often worsens during periods of stronger-than-expected revenues. Instead of saving windfall gains or strengthening fiscal buffers, many governments expand spending aggressively, reinforcing what economists describe as procyclical fiscal behaviour.
Interest payment obligations also tend to be underestimated, further widening fiscal gaps as debt servicing costs rise faster than anticipated.
Meanwhile, capital expenditure becomes the adjustment variable whenever fiscal pressures emerge.
Projects involving roads, schools, hospitals, utilities and public infrastructure are frequently delayed, scaled back or abandoned once revenues disappoint or financing conditions tighten.
The paper warns that this pattern is particularly damaging in sub-Saharan Africa, where infrastructure deficits remain among the highest in the world and development needs continue to expand rapidly.
Why This Matters Beyond Public Finance
The IMF researchers argue that budgets are not merely technical accounting documents. They are central policy instruments that shape economic expectations, investment confidence and public trust in government.
When fiscal targets are repeatedly missed, broader confidence in economic management begins to weaken.
Citizens become sceptical of government promises. Investors question fiscal discipline. Development partners worry about implementation capacity.
The consequences can extend beyond public finance into inflation management, debt sustainability, exchange rate stability and borrowing costs.
The issue is becoming even more important at a time when African governments are operating under increasingly difficult financial conditions.
Foreign aid flows are declining. Global borrowing costs remain elevated. Debt servicing pressures are intensifying. Commodity markets remain volatile. Climate-related disasters are becoming more frequent.
At the same time, governments face rising demands for social spending, infrastructure investment and employment support within rapidly growing populations.
In such an environment, the paper argues, credible budgeting becomes critical for maintaining macroeconomic stability and preserving investor confidence.
The Politics Behind Budget Slippages
One of the paper’s more revealing findings is that the problem is not simply poor forecasting.
The researchers argue that deeper institutional and political weaknesses are driving persistent fiscal deviations across many countries.
Low-income and fragile states tend to record the largest gaps between budget targets and actual outcomes, reflecting weak institutional capacity, financing constraints and limited fiscal controls.
Political economy pressures also play a major role.
Fiscal discipline tends to weaken in election periods, with governments more likely to increase spending beyond planned levels as political pressures intensify.
This often leads to wider deficits, unexpected borrowing requirements and growing fiscal vulnerabilities after elections.
The study also found that countries with stronger fiscal institutions including fiscal rules, independent fiscal councils and tighter expenditure controls, generally perform better in keeping budgets close to planned outcomes.
Similarly, IMF-supported programmes were associated with smaller fiscal slippages, suggesting that external monitoring and policy conditionality can strengthen fiscal discipline.
How Budget Deviations Affect Ordinary Citizens
The consequences of weak budget credibility are often most visible at the community level.
When governments fail to meet revenue targets or lose access to expected financing, politically sensitive recurrent spending is rarely cut first.
Instead, infrastructure and development projects are delayed.
Roads remain incomplete. Schools and hospitals face delays. Water and utility projects stall. Contractors remain unpaid. Arrears accumulate.
The result is weaker service delivery and slower economic development despite ambitious budget announcements at the start of the fiscal year.
The unpredictability also affects private sector planning, especially for businesses dependent on government contracts or public infrastructure expansion.
Over time, repeated revisions and unfulfilled commitments begin to erode confidence in the broader policy environment.
The Bigger Fiscal Challenge Ahead
The IMF paper concludes that restoring budget credibility across sub-Saharan Africa will require more than better forecasting.
Governments will need stronger fiscal institutions, tighter spending controls and more realistic budget assumptions grounded in economic realities rather than political ambition.
The researchers recommend stronger top-down budgeting systems with binding expenditure ceilings, improved commitment and payment controls to prevent arrears accumulation, and better protection for capital expenditure during fiscal stress periods.
They also argue for stronger legislative oversight, tighter controls on election-year spending reallocations and improved fiscal risk management frameworks.
Perhaps most importantly, the paper suggests that the goal should not be perfect budget execution in an increasingly uncertain world.
Rather, the objective should be to prevent fiscal slippages from becoming normalised.
Because once citizens, investors and markets stop believing government budgets, rebuilding fiscal credibility becomes significantly harder and far more expensive.
