The International Monetary Fund (IMF) has upgraded its forecast for Nigeria’s economic growth in 2026 to 4.2 percent from 4.1 percent, while warning that higher 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.
The IMF said Nigeria’s economy is benefiting from improved
macroeconomic stability and favourable terms-of-trade effects, but warned that
rising prices of essential goods would put further pressure on households.
“Higher prices for essentials are expected to further
aggravate poverty and food insecurity,” the Fund said.
At a press briefing on the report, Deniz Igan, chief of the
IMF research department’s world economic studies division, said the government
needs to balance immediate support for households with the need to maintain
fiscal stability over the medium term.
“What we are advocating for is for policymakers to balance
the near-term needs of the population, and that involves food security, that
involves energy security,” Igan said.
She said the cost of food and energy is rising
disproportionately in Nigeria, making it harder for vulnerable households to
cope with the cost of living.
Using Nigeria as an example, Igan said economic growth had
held up partly because the country exports energy, but poverty risks remain
high.
“While the growth held up in Nigeria, given energy exporter,
poverty risks are still very high,” she said.
“What we’re advocating for is cash transfers, income
support, targeted temporary income support for the most vulnerable households
in Nigeria.”
The IMF research chief said such interventions should be
consistent with the government’s medium-term fiscal framework.
SUB-SAHARAN AFRICA GROWTH AT 4.5%
The IMF expects economic growth in sub-Saharan Africa to
remain at 4.5 percent in 2026, although it said the regional forecast masks
significant differences among countries.
The report said growth prospects depend on countries’ fiscal
capacity, progress with reforms, exposure to commodity prices, climate shocks
and access to external financing.
“Oil-importing and non-resource-intensive economies are more
vulnerable to higher energy and food prices, while some larger economies
continue to benefit from earlier stabilisation and reform efforts,” the IMF
said.
The fund also said many countries in the region are largely
missing out on the global technology upswing driven by artificial intelligence
and facing additional pressure from declining official development assistance.
The report noted that growth in the rest of the region is
projected to slow from 5.6 percent in 2025 to 5.5 percent in 2026 and 5.3
percent in 2027.
GLOBAL INFLATION TO RISE
The IMF projects global inflation to rise to 4.7 percent in
2026 from 4.1 percent in 2025, largely because of higher energy and food
prices, before easing to 4.1 percent in 2027.
The report said the war-related supply shock has interrupted
the steady decline in inflation, with the effects varying across countries
according to exchange-rate movements, labour-market conditions, and the
credibility of monetary policy.
At the press briefing, Igan said central banks should
continue to prioritise price stability while adjusting their responses to the
nature of the shock and conditions in their economies.
“In a demand move… central banks again focus on price
stability and make sure that you keep a stance that is sufficiently restrictive
for inflation to return to target,” she said.
She said monetary policy responses should reflect
differences in economic conditions, including the tightness of labour markets,
prevailing inflation levels and countries’ exposure to artificial intelligence
and commodity prices.
Silvana Tenreyro, director of the research department at the
IMF, said countries need to move beyond managing immediate crises and rebuild
their capacity to withstand future shocks.
“Move from just coping to rebuilding. We need to restore
fiscal space. We need to rebuild supply-side resilience,” Tenreyro said.
She said governments need to identify vulnerabilities in
critical inputs, including energy, and take steps to strengthen their ability
to withstand further disruptions.
The IMF also expects global trade volume growth to slow from
5 percent in 2025 to 4.6 percent in 2026 before rising to 4.7 percent in 2027.
The report attributed the slowdown to tariffs, adjustments
in trade relationships and changes in global production chains, although
technology-related trade flows are expected to provide some support.
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