The IMF upgrades Nigeria’s growth outlook but urges targeted cash transfers to protect vulnerable households from rising food and energy prices.
The International Monetary Fund (IMF) has raised Nigeria’s economic growth forecast for 2026 to 4.2 per cent from its previous projection, while maintaining its 2027 forecast at 4.3 per cent.
The projections were contained in the IMF’s 2026 World Economic Outlook, titled “Resilience Under Strain, Urgent Choices,” presented in Bangkok, Thailand, by the Fund’s Director of Research, Silvana Tenreyro.
The 2026 forecast represents an upward revision of 0.1 percentage point, while the projection for 2027 remains unchanged.
Despite the improved outlook, the IMF warned that rising food and energy prices could worsen poverty and food insecurity in Nigeria, urging the Federal Government to provide targeted, temporary financial assistance to vulnerable households.
Responding to a question from Nigerian journalist Nancy Nnaji, IMF Research Department Division Chief Deniz Igan said policymakers needed to address the immediate hardship facing households without undermining medium-term economic stability.
Igan said, “What we are advocating for is for policymakers to balance the near-term needs of the population, including food security and energy security, given that the prices of food and energy are increasing disproportionately, while also keeping in mind medium-term stability.”
She identified Nigeria as an example of a country where economic growth had remained resilient despite significant pressures on households.
“While growth held up in Nigeria, given that it is an energy exporter, power pressures are still very high, and we are mindful that the population is suffering, especially when it comes to food security, which also faces risks from El Niño,” she said.
Igan recommended cash transfers and targeted, temporary income support for the country’s most vulnerable households to help alleviate poverty and protect food security.
She added that such interventions should remain fiscally sustainable through more efficient government spending and stronger revenue collection.
The IMF attributed Nigeria’s improved growth outlook to greater macroeconomic stability and favourable terms of trade. However, it cautioned that higher prices for essential goods could further aggravate poverty and food insecurity.
The recommendations come amid calls by opposition presidential aspirants Atiku Abubakar and Peter Obi for the President Bola Tinubu administration to restore elements of petrol subsidies to ease the cost-of-living crisis.
Meanwhile, the IMF projected global economic growth to slow to 3.1 per cent in 2026 before recovering to 3.4 per cent in 2027.
Tenreyro said the global economy had remained resilient but warned that the resilience was under strain, with risks tilted to the downside.
She attributed the pressure partly to war-related increases in energy and commodity prices, which are fuelling inflation and slowing economic activity. At the same time, investment driven by artificial intelligence is supporting trade, demand and growth, although it is also contributing to price pressures.
The Fund projected global headline inflation to rise to 4.7 per cent in 2026 before easing to 4.1 per cent in 2027.
Separately, the World Bank last week raised its forecast for Nigeria’s economic growth in 2026 to 4.3 per cent, up from 4.0 per cent in 2025. It also projected growth of 4.4 per cent in both 2027 and 2028.
The World Bank attributed the improved outlook to strengthening macroeconomic stability, rising investor confidence and a gradual recovery in private investment.
Data from the National Bureau of Statistics showed that Nigeria’s real Gross Domestic Product grew by 4.43 per cent year-on-year in the second quarter of 2026, compared with 4.23 per cent in the corresponding period of 2025.
In a related development, the Federal Government announced a 30-day discount window on petrol sold by the Nigerian National Petroleum Company Limited, with priority given to public transport operators nationwide.
Finance Minister Taiwo Oyedele said the measure was funded from the company’s retail margins and not from the federal budget or the Federation Account. Critics, however, have challenged the explanation, arguing that the initiative amounts to a return of fuel subsidies.
