Budget Credibility in Sub-Saharan Africa

This paper analyses budget credibility in Sub-Saharan Africa, where fiscal plans frequently diverge from execution. Using a new dataset covering 39 countries during 2021–24, it documents persistent deficit overruns driven by optimistic revenue forecasts, overruns in current spending, and systematic under-execution of capital expenditure. The paper shows that deviations are shaped by structural features, financing volatility, institutional quality, and political cycles. Countries with stronger fiscal institutions and IMF-supported programs tend to exhibit smaller and less volatile deviations. The findings highlight the macroeconomic and governance costs of weak budget credibility and point to policy priorities, including more realistic forecasting, stronger expenditure controls, improved cash management, and institutional reforms to better align budgets with outcomes.