The International Monetary Fund (IMF) has warned that rising prices of essential goods could deepen poverty and worsen food insecurity in Nigeria despite recent improvements in the country’s macroeconomic stability.
In its July 2026 World Economic Outlook Update, the IMF projected that Nigeria’s economy would grow by 4.1 per cent in 2026 and 4.3 per cent in 2027, while cautioning that increasing living costs could erode the benefits of ongoing economic reforms.
According to the Fund, Nigeria has recorded improved macroeconomic stability and favourable terms of trade, but households remain vulnerable to rising prices of basic necessities.
The IMF also projected that Sub-Saharan Africa’s economy would expand by 4.3 per cent in 2026, although growth across the region would depend on policy implementation, economic reforms and exposure to external shocks.
Globally, the Fund forecast economic growth of 3.0 per cent in 2026 and 3.4 per cent in 2027, attributing the slowdown to the economic impact of renewed conflict in the Middle East despite gains from artificial intelligence-driven investment.
The report warned that inflationary pressures remain elevated, projecting global headline inflation 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.
The IMF further projected that crude oil prices could increase by 32 per cent, natural gas prices by 22 per cent, fertiliser prices by 26 per cent, and food prices by eight per cent in 2026, driven by higher energy, transport and production costs.
It cautioned that prolonged disruptions in energy and fertiliser markets could significantly worsen food insecurity, particularly in low-income countries across Sub-Saharan Africa.
The Fund advised governments against introducing broad fuel subsidies, tax cuts or price controls, recommending instead targeted and temporary support for vulnerable households alongside policies that promote price stability.
It also urged countries to strengthen tax administration, improve public spending efficiency, rebuild fiscal buffers and expand social protection programmes to cushion the impact of rising living costs while maintaining debt sustainability.
The warning comes as Nigeria’s headline inflation rate rose to 15.93 per cent in May 2026, marking the third consecutive monthly increase amid higher energy costs, insecurity and global supply challenges.
