IMF says higher essential commodities prices could worsen poverty and food insecurity in Nigeria

The International Monetary Fund (IMF) has maintained Nigeria’s economic growth forecast at 4.1 per cent for 2026, while warning that rising prices of essential goods are expected to worsen poverty and food insecurity across the country.

In its July 2026 World Economic Outlook (WEO) Update released on Wednesday,  June the IMF projected that Nigeria’s gross domestic product (GDP) would grow by 4.1 per cent in 2026 and improve to 4.3 per cent in 2027, leaving both forecasts unchanged from its April outlook. The IMF also retained its growth projections for sub-Saharan Africa at 4.3 per cent in 2026 and 4.5 per cent in 2027.

According to the report, “Nigeria is supported by improved macroeconomic stability and favorable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity.” The Fund noted that while growth in sub-Saharan Africa is expected to remain broadly stable, performance will vary significantly across countries due to differences in policy implementation, reform progress and exposure to external shocks.

It added that oil-importing, non-resource-intensive economies are likely to face greater pressure from higher energy and food prices, while some larger economies continue to benefit from earlier stabilisation and reform efforts despite missing out on much of the global artificial intelligence-driven technology boom.Globally, the IMF revised its 2026 growth forecast downward to 3 per cent, from 3.1 per cent projected in April, while increasing its 2027 forecast to 3.4 per cent.

The organisation attributed the slight slowdown to the impact of the conflict in the Middle East, although it said stronger demand driven by advances in artificial intelligence and technology adoption had helped offset some of the negative effects. Despite the resilience of the global economy, the IMF warned that risks remain tilted to the downside.

According to the report, “The balance of risks remains tilted to the downside,” citing renewed trade tensions, geopolitical conflicts and tighter financial conditions as major threats to global economic growth. The IMF urged governments to rebuild fiscal buffers amid rising debt levels, higher borrowing costs and growing external uncertainty.

It said credible fiscal consolidation should be supported by stronger revenue mobilisation, improved tax administration, more efficient public spending and increased investment in infrastructure, skills development and targeted social protection programmes. The Fund also advised commodity-exporting countries to avoid excessive government spending during periods of high commodity prices.

According to the report, “Economies benefiting from commodity windfalls and the upturn in the global technology cycle should avoid procyclical spending and save or redeploy gains within a credible medium-term fiscal framework anchored in debt sustainability.”

The IMF further called on policymakers to accelerate structural reforms aimed at improving productivity, strengthening labour markets, expanding digital and physical infrastructure, promoting predictable trade policies and deepening international cooperation to support sustainable economic growth.