The IMF raises Nigeria’s 2026 growth forecast to 4.2% but warns rising food and energy prices could worsen poverty and food insecurity.
The International Monetary Fund (IMF) has raised its economic growth forecast for Nigeria in 2026 to 4.2 per cent from 4.1 per cent, while warning that rising food and energy prices could worsen poverty and food insecurity.
The Washington-based institution announced the revision in its October 2026 World Economic Outlook (WEO) report released on Tuesday. It attributed Nigeria’s improved growth outlook partly to greater macroeconomic stability and favourable terms-of-trade effects but cautioned that rising prices of essential goods continue to place pressure on households.
“Higher prices for essentials are expected to further aggravate poverty and food insecurity,” the IMF said.
At a press briefing on the report, Deniz Igan, chief of the IMF Research Department’s World Economic Studies Division, said the Nigerian government needs to balance immediate household support with the need to preserve fiscal stability over the medium term.
She said food and energy costs were rising disproportionately in Nigeria, making it increasingly difficult for vulnerable households to cope with the cost of living.
“While the growth held up in Nigeria, given energy exporter, poverty risks are still very high,” Igan said.
She recommended targeted and temporary financial assistance for the most vulnerable households, including cash transfers and income support, to help them manage rising living costs.
“What we’re advocating for is cash transfers, income support, targeted temporary income support for the most vulnerable households in Nigeria,” she said.
Igan added that such interventions should remain consistent with the government’s medium-term fiscal framework to ensure that immediate relief does not undermine longer-term fiscal stability.
Sub-Saharan Africa’s Growth Forecast Holds at 4.5%
The IMF expects economic growth in sub-Saharan Africa to remain at 4.5 per cent in 2026, although it warned that the regional outlook masks significant differences among countries.
According to the report, growth prospects across the region will depend on countries’ fiscal capacity, progress with economic reforms, exposure to commodity price movements, climate shocks and access to external financing.
The fund said oil-importing and non-resource-intensive economies face greater exposure to rising food and energy prices, while some larger economies continue to benefit from earlier stabilisation efforts and reforms.
It also warned that many countries in the region are missing out on the global technology expansion driven by artificial intelligence, while declining official development assistance is adding to their economic challenges.
Across the rest of the region, growth is projected to slow from 5.6 per cent in 2025 to 5.5 per cent in 2026 and 5.3 per cent in 2027, the report said.
Global Inflation Expected to Rise to 4.7%
The IMF projects global inflation to increase to 4.7 per cent in 2026, up from 4.1 per cent in 2025, largely due to higher food and energy prices. Inflation is expected to ease to 4.1 per cent in 2027.
The report said a war-related supply shock had interrupted the steady decline in global inflation, with the impact varying across countries depending on exchange-rate movements, labour-market conditions and the credibility of monetary policy.
At the briefing, Igan said central banks should continue to prioritise price stability while adapting their responses to the nature of the economic shock and conditions in their respective economies.
She explained that monetary policy decisions should account for prevailing inflation levels, labour-market conditions and countries’ exposure to commodity prices and developments in artificial intelligence.
Silvana Tenreyro, director of the IMF Research Department, said governments must move beyond managing immediate economic crises and strengthen their capacity to withstand future disruptions.
“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 inputs, particularly energy, and strengthen their ability to withstand future supply disruptions.
Global Trade Growth Set to Slow
The IMF also expects global trade volume growth to slow from 5 per cent in 2025 to 4.6 per cent in 2026 before recovering slightly to 4.7 per cent in 2027.
The report attributed the slowdown to tariffs, adjustments in trade relationships and changes in global production chains. However, technology-related trade flows are expected to provide some support.
For Nigeria, the revised growth projection points to continued economic expansion, but the IMF’s warning highlights the gap between macroeconomic improvements and the financial realities facing households. Its recommendation for targeted income support underscores the need to ensure that economic gains translate into greater protection for vulnerable Nigerians as food and energy costs rise
