IMF Raises Nigeria’s 2026 Growth Forecast to 4.2%, Warns Poverty Remains High

The International Monetary Fund (IMF) has raised Nigeria’s economic growth forecast by 10 basis points to 4.2 per cent for 2026, while warning that high poverty levels and rising living costs continue to place pressure on households despite improving economic indicators.

In its latest World Economic Outlook, released during the ongoing IMF and World Bank Annual Meetings, the Fund projected that Nigeria’s economy would grow by 4.2 per cent in 2026 and 4.3 per cent in 2027. However, it stressed that stronger economic growth had not removed the hardship experienced by many Nigerians.

The IMF called on the Nigerian government to provide targeted and temporary support to vulnerable households, particularly those struggling with the rising costs of food and energy. It also urged policymakers to balance immediate household needs with the need to maintain fiscal stability over the medium term.

Speaking on fiscal policy responses to rising living costs in Africa, Deniz Igan, a division chief in the IMF’s Research Department, said governments needed to prioritise food and energy security as prices for essential goods increased disproportionately.

She explained that policymakers faced the challenge of addressing the immediate needs of their populations while protecting longer-term economic stability. According to Igan, determining how to achieve both objectives remained a key policy question for governments across the region.

Igan also referenced the IMF’s analysis of fiscal policy measures that could be most effective during a cost-of-living crisis. She said the Fund had examined situations in which essential goods become more expensive faster than other items in the average household’s consumption basket, placing a heavier burden on families with limited incomes.

Using Nigeria as an example, the IMF official noted that the country’s economic growth had remained resilient, partly in the context of its position as an energy exporter. Nevertheless, she said poverty remained high and households continued to experience significant pressure.

The Fund also highlighted food and energy insecurity, alongside potential risks associated with El Niño, as concerns requiring attention. Its recommendations underscore the need for targeted assistance to vulnerable Nigerians while maintaining policies that support medium-term economic stability.