IMF: Rising essentials may push more Nigerians into poverty
The Fund says Nigeria's economy is set to grow over the next two years, but higher food and energy costs could leave more households struggling.
Nigeria’s economy may continue to expand over the next two years, but rising prices of food, energy and other essential goods could push more Nigerians into poverty and worsen food insecurity, according to the latest outlook from the International Monetary Fund (IMF).
In its July 2026 World Economic Outlook Update released on Wednesday, the IMF retained its projection that Nigeria’s economy will grow by 4.1 percent in 2026 before strengthening to 4.3 percent in 2027. However, it warned that the benefits of improved macroeconomic stability could be undermined if the cost of basic necessities continues to climb.
The Fund said Nigeria has made progress in stabilising its economy and has benefited from favourable global trade conditions, but many households remain vulnerable to the rising cost of living.
“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 warning comes as many Nigerians continue to grapple with high food prices, transportation costs and household expenses despite signs that broader economic reforms are beginning to improve investor confidence.
Across sub-Saharan Africa, the IMF expects economic growth to remain steady at 4.3 percent in 2026, although it said outcomes will differ across countries depending on policy implementation, structural reforms and exposure to global economic shocks.
The Fund noted that economies heavily dependent on imported energy and food remain particularly vulnerable to rising global commodity prices, while countries that have implemented stabilisation reforms have shown greater resilience despite reduced development assistance and limited participation in the global artificial intelligence investment boom.
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Globally, the IMF projected economic growth of 3.0 percent in 2026 and 3.4 percent in 2027, below the average recorded in 2024 and 2025. It attributed the slower pace largely to the economic consequences of the conflict in the Middle East, although increased investment in artificial intelligence is expected to cushion part of the impact.
The Fund also warned that inflationary pressures are building again after a surge in global energy prices.
It projects global headline inflation to rise from 4.1 percent in 2025 to 4.7 percent in 2026 before easing to 3.9 percent in 2027, noting that the steady decline in inflation seen since early 2024 has stalled.
According to the report, renewed geopolitical tensions remain the biggest threat to the global economy because they could disrupt supply chains, increase commodity prices and tighten global financial conditions.
The IMF estimates that crude oil prices will rise by 32 percent in 2026 compared with 2025, while natural gas prices are projected to increase by 22 percent. Fertiliser prices are expected to climb by 26 percent, with global food prices forecast to rise by eight percent as higher energy, transport and input costs feed through the supply chain.
The report warned that these pressures could have severe consequences for developing economies, particularly in sub-Saharan Africa, where millions of households already spend a significant share of their income on food.
It also cautioned that food insecurity could deteriorate further if disruptions in energy and fertiliser markets persist, especially in countries where smallholder farmers lack the resources to absorb higher production costs.
Rather than introducing broad fuel subsidies, tax cuts or price controls, the IMF urged governments to provide temporary and targeted support for vulnerable households while maintaining policies aimed at restoring price stability.
The Fund also called on countries to strengthen tax administration, improve public spending efficiency, rebuild fiscal buffers and expand well-targeted social protection programmes to cushion the impact of rising living costs without undermining long-term economic stability.
