The International Monetary Fund (IMF) has cautioned that surging prices of essential goods, particularly food and energy, are expected to push more Nigerians into poverty and worsen food insecurity, despite improvements in the country’s macroeconomic stability and a positive economic growth 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, while reforms and improved macroeconomic conditions are supporting Nigeria’s economic recovery, the rising cost of basic necessities continues to erode household purchasing power and threaten the welfare of millions of citizens.
“Nigeria is supported by improved macroeconomic stability and favourable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity,” the report stated.
The IMF projected that economic growth across Sub-Saharan Africa would remain relatively stable at 4.3 per cent in 2026 before rising to 4.5 per cent in 2027. However, it noted that performance across the region would vary significantly depending on countries’ policy responses, reform implementation and vulnerability to external shocks.
It explained that oil-importing and non-resource-intensive economies are bearing the brunt of higher food and energy prices, while some larger economies are benefiting from earlier economic stabilisation and reform measures. Nevertheless, the region continues to lag behind in benefiting from the global artificial intelligence-driven technology boom and is also facing reduced official development assistance.
Globally, the IMF revised its growth forecast downward, projecting the world economy to expand by 3.0 per cent in 2026 and 3.4 per cent in 2027, compared to the average growth of 3.5 per cent recorded in 2024 and 2025.
The Fund attributed the weaker outlook to the lingering effects of the conflict in the Middle East, although it said increased investment and demand driven by advances in artificial intelligence would partly cushion the slowdown.
The IMF also warned that global inflation is expected to rise from 4.1 per cent in 2025 to 4.7 per cent in 2026 before easing to 3.9 per cent in 2027, indicating that the recent trend of moderating inflation has stalled.
It identified renewed geopolitical tensions in the Middle East, volatile commodity prices, disrupted supply chains and increasing trade fragmentation as major risks to global economic stability.
The Fund urged governments to strengthen fiscal buffers, restore price stability and implement structural reforms that improve energy security, enhance AI readiness and promote stronger international cooperation.
