The International Monetary Fund (IMF) has retained Nigeria’s economic growth forecast at 4.1 percent for 2026, but warned that higher prices for essential commodities will worsen poverty and food insecurity.
In its July 2026 World Economic Outlook (WEO) Update
released on Wednesday, the IMF said Nigeria’s gross domestic product (GDP)
would expand by 4.1 percent this year and improve to 4.3 percent in 2027 —
unchanged from its April forecast.
The Bretton Woods institution also maintained sub-Saharan
Africa’s growth outlook at 4.3 percent for 2026 and 4.5 percent for 2027.
“Nigeria is supported by improved macroeconomic stability
and favorable terms-of-trade effects, though higher prices for essentials are
expected to further aggravate poverty and food insecurity,” the IMF said.
“Growth in sub-Saharan Africa is expected to remain broadly
stable at 4.3 percent in 2026, though this masks substantial divergence across
countries, reflecting differences in policy space, reform implementation, and
exposure to external shocks”.
“Oil-importing, non-resource-intensive economies are more
adversely affected by higher energy and food prices, whereas some larger
economies continue to benefit from earlier stabilisation and reform efforts,
even though they are largely absent from the AI-driven global technology
upswing and face headwinds from the decline in official development
assistance.”
GLOBAL GROWTH FORECAST DOWNGRADED TO 3%
In the report, the multilateral institution downgraded its
global growth forecast for 2026 to 3 percent from 3.1 percent projected in
April, while raising its 2027 projection to 3.4 percent.
“The modest slowdown reflects the effects of the war in the
Middle East being partly offset by accelerated demand-driven momentum in the
global technology cycle thanks to advances in artificial intelligence (AI) and
its adoption,” the organisation said.
The IMF said the global economy has remained resilient
despite heightened uncertainty, noting that downside risks continue to dominate
the outlook.
“The balance of risks remains tilted to the downside,” the
IMF said, warning that renewed trade tensions, geopolitical conflicts, and
tighter financial conditions could weaken global growth further.
The IMF advised countries to rebuild fiscal buffers amid
elevated debt levels, higher borrowing costs, and growing external uncertainty.
“Rebuilding fiscal space remains essential given elevated
debt, higher borrowing costs, and heightened external uncertainty,” the fund
said.
The lender said fiscal consolidation should be anchored on
stronger revenue mobilisation, improved tax administration, and more efficient
public spending.
“Credible medium-term consolidation should rest on durable
revenue measures, stronger tax administration, greater spending efficiency, and
reallocation toward growth-enhancing priorities such as infrastructure, skills,
and well-targeted social protection,” the report said.
The IMF also urged commodity-exporting countries to avoid
procyclical spending during periods of higher revenues.
“Economies benefiting from commodity windfalls and the
upturn in the global technology cycle should avoid procyclical spending and
save or redeploy gains within a credible medium-term fiscal framework anchored
in debt sustainability,” it said.
The lender urged policymakers to accelerate structural
reforms to improve productivity, strengthen labour markets, expand digital and
physical infrastructure, and deepen international cooperation to support
sustainable global growth.
The IMF also called for predictable trade policies to reduce
uncertainty and encourage private investment.
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