The International Monetary Fund has warned that rising prices of essential goods could worsen poverty and food insecurity in Nigeria despite improvements in the country’s macroeconomic stability and favourable external trade conditions.
The IMF disclosed this in its October 2026 World Economic Outlook report, titled ‘Resilience Under Strain, Urgent Choices’, published on Tuesday, highlighting the growing disconnect between improvements in economic indicators and the living conditions of vulnerable households.
“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 Fund stated.
The assessment suggests that Nigeria’s recent economic stabilisation efforts have strengthened its economic outlook but have yet to eliminate the pressures facing households, particularly those struggling with the rising cost of food and other basic necessities.
According to the IMF, Nigeria is among the larger economies in sub-Saharan Africa benefiting from earlier stabilisation measures and economic reforms, although the region remains exposed to commodity price volatility, climate shocks and limited access to external financing.
The report projected that economic growth in sub-Saharan Africa would remain stable at 4.5 per cent in 2026, reflecting differences in policy implementation, fiscal capacity and exposure to global economic disruptions.
It stated, “Growth in sub-Saharan Africa is expected to remain stable at 4.5 per cent in 2026, though this masks some substantial divergence across countries.”
The IMF explained that while oil-importing and non-resource-intensive economies were facing greater pressure from rising energy and food prices, some larger economies were benefiting from earlier reforms and improved economic conditions.
Nigeria’s favourable terms-of-trade position provides some support to economic activity, particularly amid changes in international commodity prices.
However, the Fund’s assessment indicates that stronger macroeconomic fundamentals do not automatically translate into improved household welfare, especially when the cost of essential commodities 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.
The IMF’s country-specific projections showed that Nigeria’s economy is expected to expand by 4.2 per cent in 2026, compared with an estimated 4.0 per cent in 2025, before accelerating to 4.3 per cent in 2027.
The 2026 forecast represents an upward revision of 0.1 percentage point from the Fund’s April projection, while the 2027 estimate was also raised by 0.1 percentage point.
On inflation, the IMF projected that Nigeria’s average consumer price inflation would decline from 23.0 per cent in 2025 to 15.6 per cent in 2026 and 14.7 per cent in 2027.
The report also projected Nigeria’s current account surplus at 7.0 per cent of Gross Domestic Product in 2026, compared with 4.8 per cent in 2025, before moderating to 4.4 per cent in 2027.
These projections suggest a stronger external position in 2026, although the expected decline in the surplus next year points to a moderation in external balances.
The IMF further warned that persistent geopolitical tensions, higher food and energy prices and tighter global financing conditions could undermine economic growth, particularly in developing countries.
It stated, “Risks are skewed to the downside,” identifying a prolonged Middle East conflict and further disruptions to energy infrastructure as potential threats to global economic stability.
To cushion vulnerable households, the Fund recommended temporary and targeted financial support rather than broad measures that could undermine fiscal sustainability.
It said governments should “rely primarily on temporary, targeted income support for the most vulnerable,” while strengthening social protection systems to respond more effectively to future economic shocks.
PUNCH Online earlier reported that Nigeria recorded the world’s largest increase in the number of people living in multidimensional poverty, with an additional 17.9 million Nigerians falling into poverty between 2021 and 2024, according to the 2026 Global Multidimensional Poverty Index.
The report, published on Monday by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative, showed that Nigeria experienced a reversal in poverty reduction after recording improvements between 2018 and 2021.
The findings placed Nigeria ahead of Afghanistan, which recorded an increase of 5.3 million poor people during its latest assessment period.