The International Monetary Fund (IMF) has raised Nigeria’s economic growth forecast for 2026 to 4.2 per cent from 4.1 per cent, warning that rising food and energy prices could deepen poverty and food insecurity.
The Fund, in its October 2026 World Economic Outlook released on Tuesday, said improved macroeconomic stability and favourable terms of trade were supporting Nigeria’s economic performance.
However, it cautioned that the rising cost of essential goods continued to place pressure on households, particularly vulnerable Nigerians struggling with the cost of living.
“Higher prices for essentials are expected to further aggravate poverty and food insecurity,” the IMF said.
At a briefing on the report, Deniz Igan, chief of the IMF research department’s World Economic Studies Division, called for targeted financial assistance to help vulnerable households cope with rising living costs.
She said Nigeria’s position as an energy-exporting country had helped sustain economic growth, but the benefits had not eliminated the risk of worsening poverty.
“While the growth held up in Nigeria, given energy exporter, poverty risks are still very high,” Igan said.
She recommended cash transfers and temporary income support for the most vulnerable households, stressing that such measures should remain consistent with the government’s medium-term fiscal framework.
The IMF official said policymakers needed to balance immediate demands for food and energy security with the need to preserve fiscal stability over the longer term.
The revised Nigerian outlook comes as the Fund projects economic growth in sub-Saharan Africa to remain at 4.5 per cent in 2026.
However, it warned that the regional figure concealed significant differences in economic performance, depending on countries’ exposure to commodity prices, fiscal capacity, reform progress, climate shocks and access to external financing.
According to the report, oil-importing countries and economies with limited natural resources are more exposed to higher food and energy prices, while some larger economies continue to benefit from previous stabilisation measures and reforms.
The Fund also highlighted the region’s limited participation in the global technology expansion driven by artificial intelligence, alongside mounting pressure from declining official development assistance.
Globally, the IMF expects inflation to rise to 4.7 per cent in 2026 from 4.1 per cent in 2025, largely due to higher food and energy prices, before easing to 4.1 per cent in 2027.
It said a war-related supply shock had interrupted the steady decline in inflation, with the impact varying across countries according to exchange-rate movements, labour-market conditions and the credibility of monetary policies.
Igan urged central banks to maintain their focus on price stability while tailoring their responses to the nature of economic shocks and domestic conditions.
Silvana Tenreyro, director of the IMF research department, called on governments to strengthen their capacity to withstand future disruptions rather than focus solely on managing immediate crises.
“Move from just coping to rebuilding. We need to restore fiscal space. We need to rebuild supply-side resilience,” Tenreyro said.
She urged countries to identify vulnerabilities in critical supplies, particularly energy, and strengthen their ability to respond to further disruptions.
The IMF also projected global trade volume growth to slow from five per cent in 2025 to 4.6 per cent in 2026, before recovering slightly to 4.7 per cent in 2027.
It attributed the slowdown to tariffs, changing trade relationships and adjustments in global production chains, although technology-related trade was expected to provide some support.
Discussion0