The International Monetary Fund (IMF) has cautioned that rising prices of essential goods and services could push more Nigerians into poverty and worsen food insecurity, even as recent economic reforms continue to improve the country’s macroeconomic outlook.
The warning is contained in the IMF’s July 2026 World Economic Outlook Update, which retained Nigeria’s economic growth projections at 4.1 per cent for 2026 and 4.3 per cent for 2027.
According to the Fund, Nigeria’s economy is benefiting from stronger macroeconomic stability and favourable terms of trade, but the gains may not immediately translate into improved living conditions because of the persistent increase in the cost of basic necessities.
The IMF noted that higher food and energy prices remain a major concern for many countries across Sub-Saharan Africa, particularly economies that rely heavily on imports and have limited fiscal space to cushion households from inflationary pressures.
While projecting that economic growth across Sub-Saharan Africa will remain relatively stable at 4.3 per cent in 2026 before rising to 4.5 per cent in 2027, the Fund said performance across the region would continue to vary depending on the pace of reforms, exposure to external shocks and available policy options.
It observed that although some of the region’s larger economies have benefited from earlier economic reforms and improved stability, many African countries remain largely excluded from the rapid expansion of artificial intelligence-driven technological growth that is supporting stronger economic activity elsewhere.
For Nigeria, the IMF said sustained reforms have strengthened the country’s economic fundamentals, but warned that elevated prices for food and other essential commodities are likely to place additional pressure on vulnerable households.
Globally, the Fund revised its outlook downward, forecasting world economic growth of 3.0 per cent in 2026 and 3.4 per cent in 2027, compared with an average growth rate of 3.5 per cent recorded in 2024 and 2025.
The IMF attributed the slower global expansion largely to the economic effects of continued tensions in the Middle East, although it said stronger investment and productivity linked to advances in artificial intelligence are expected to offset part of the slowdown.
The report also projected that global inflation would rise from 4.1 per cent in 2025 to 4.7 per cent in 2026 before easing to 3.9 per cent in 2027, signalling that the earlier decline in inflation has lost momentum.
Looking ahead, the IMF warned that renewed geopolitical tensions, particularly in the Middle East, could trigger fresh volatility in commodity markets, disrupt global supply chains and tighten financial conditions.
It also cautioned that increasing trade fragmentation could weigh on global output while driving prices higher, urging governments to strengthen fiscal resilience, restore price stability, improve energy security and accelerate structural reforms that enhance technological readiness and economic cooperation.
