By Emmanuella Opara | October 14th 2026
KEY POINTS
- -The International Monetary Fund (IMF) has warned that rising prices of essential goods could worsen poverty and food insecurity in Nigeria despite improved macroeconomic stability.
- -Nigeria’s economy is projected to grow by 4.2 per cent in 2026, up from an estimated 4.0 per cent in 2025.
- -The IMF expects economic growth to accelerate to 4.3 per cent in 2027.
- -Sub-Saharan Africa’s economic growth is projected to remain at 4.5 per cent in 2026.
- -The Fund identified geopolitical tensions, higher food and energy prices, and tighter global financing conditions as risks to economic growth.
MAIN STORY
The International Monetary Fund (IMF) has warned that rising prices of essential goods could deepen poverty and food insecurity in Nigeria, despite improvements in macroeconomic stability and favourable external trade conditions.
The warning was contained in the Fund’s October 2026 World Economic Outlook report, titled Resilience Under Strain, Urgent Choices, published on Tuesday.
The report highlighted the gap between improvements in Nigeria’s economic indicators and the financial pressures facing households, particularly those struggling with the cost of food and other basic necessities.
“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 IMF stated.
The assessment indicates that although economic stabilisation measures have improved Nigeria’s outlook, the gains have not removed the pressure on household purchasing power as essential commodities become more expensive.
According to the Fund, Nigeria is among the larger economies in sub-Saharan Africa benefiting from earlier stabilisation measures and economic reforms. However, countries across the region remain exposed to fluctuations in commodity prices, climate shocks and limited access to external financing.
The IMF projected that sub-Saharan Africa’s economy would grow by 4.5 per cent in 2026, although the regional estimate masks differences in the performance of individual countries.
“Growth in sub-Saharan Africa is expected to remain stable at 4.5 percent in 2026, though this masks some substantial divergence across countries,” the Fund stated.
It explained that oil-importing and non-resource-intensive economies were facing greater pressure from higher energy and food prices, while some larger economies were benefiting from previous reforms and improved economic conditions.
Nigeria’s favourable terms-of-trade position is expected to provide some support for economic activity. However, the IMF’s assessment indicates that stronger macroeconomic fundamentals do not necessarily translate into improved living conditions when the cost of essential goods continues to rise.
The report also identified declining official development assistance and limited participation in the global artificial intelligence investment boom as challenges facing several African economies.
For Nigeria, the IMF projected economic growth of 4.2 per cent in 2026, compared with an estimated 4.0 per cent in 2025. The economy is expected to expand by a further 4.3 per cent in 2027.
The 2026 forecast represents an upward revision of 0.1 percentage point from the Fund’s April projection. Its forecast for 2027 was also raised by 0.1 percentage point.
Despite the improved growth outlook, the IMF warned that persistent geopolitical tensions, rising food and energy prices, and tighter global financing conditions could weaken economic growth, particularly in developing countries.
“Risks are skewed to the downside,” the Fund stated, pointing to a prolonged conflict in the Middle East and further disruptions to energy infrastructure as potential threats to global economic stability.
THE ISSUES
The IMF’s assessment highlights the difference between economic growth and improvements in household welfare.
Although Nigeria’s growth forecast has been revised upwards, rising prices of essential goods remain a threat to the living standards of households, particularly those with limited financial resources.
Food and energy costs are central to this concern because increases in these expenses can leave households with less money for other basic needs.
The report also points to external vulnerabilities facing African economies, including commodity price volatility, climate-related shocks and limited access to international financing.
For Nigeria, the challenge is to sustain macroeconomic stability while ensuring that economic improvements translate into better living conditions and reduced food insecurity.
WHAT’S BEING SAID
“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 International Monetary Fund stated.
“Growth in sub-Saharan Africa is expected to remain stable at 4.5 percent in 2026, though this masks some substantial divergence across countries,” the International Monetary Fund stated.
“Risks are skewed to the downside,” the International Monetary Fund stated.
WHAT’S NEXT
Nigeria’s economic performance will depend partly on whether the projected growth can be sustained amid domestic cost pressures and external economic risks.
The IMF’s projections point to continued expansion in 2026 and 2027, but the report’s warning on poverty and food insecurity highlights the importance of addressing the effects of rising essential goods prices on households.
Developments in international energy markets, geopolitical tensions and global financing conditions will also remain important to the economic outlook for Nigeria and other developing economies.
BOTTOM LINE
The IMF expects Nigeria’s economy to grow by 4.2 per cent in 2026, but warns that rising prices of essential goods could worsen poverty and food insecurity. The central challenge is ensuring that improved economic stability translates into better living conditions for Nigerians.
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