IMF Warns Rising Food Prices Could Push More Nigerians Into Poverty

(IMF. Photo Credit: Vanguard News)

The International Monetary Fund, IMF, has cautioned that climbing prices for basic goods will worsen poverty and food insecurity in Nigeria, even as the country continues to record improved macroeconomic stability.

The Fund nonetheless kept its growth projections for the Nigerian economy unchanged at 4.1 per cent for 2026 and 4.3 per cent for 2027.

In its July 2026 World Economic Outlook Update, the IMF also revised downward its global growth projection to 3.0 per cent for 2026, a drop from the 3.5 per cent average recorded across 2024 and 2025.

The Fund attributed this slowdown to the fallout from the Middle East conflict combined with the fact that gains from the artificial intelligence-driven technology boom have not been evenly distributed worldwide.

Addressing developments in Nigeria and the wider Sub-Saharan Africa region, the IMF explained that growth across Sub-Saharan Africa is projected to hold broadly steady at 4.3 per cent in 2026, though this overall figure conceals wide variation between individual countries, shaped by differing levels of policy flexibility, the pace of reform implementation, and each country’s vulnerability to external shocks.

It noted that economies which import oil and lack significant natural resources are bearing the brunt of rising energy and food costs more severely, whereas certain larger economies are still benefiting from stabilisation and reform measures introduced earlier, even though these same economies have largely missed out on the AI-driven global technology upswing and are contending with the effects of shrinking official development assistance.

On Nigeria specifically, the Fund stated that the country is being buoyed by stronger macroeconomic stability and favourable terms-of-trade conditions, but warned that rising costs for essential goods are likely to worsen the country’s poverty and food insecurity challenges.

According to the IMF’s projections, Nigeria’s economy will grow by 4.1 per cent in 2026 and 4.3 per cent in 2027, while the broader Sub-Saharan Africa region is expected to expand by 4.3 per cent in 2026 and 4.5 per cent in 2027.

Turning to the global picture, the Fund projected worldwide growth at 3.0 per cent in 2026 and 3.4 per cent in 2027, down from the 3.5 per cent average seen in 2024 and 2025.

It described this as “a modest slowdown,” explaining that the impact of the Middle East war is being partially cushioned by stronger, demand-driven momentum within the global technology sector, fuelled by advances in artificial intelligence and its widening adoption.

The IMF also flagged concerns over inflation, projecting that global headline inflation will climb from 4.1 per cent in 2025 to 4.7 per cent in 2026 before easing to 3.9 per cent in 2027.

It noted that the disinflation trend observed in previous years has now stalled.

Outlining risks that could derail this outlook, the Fund warned that a resurgence of conflict in the Middle East remains a significant possibility and could prolong volatility in commodity prices, place further strain on global supply chains, push prices higher and put pressure on financial conditions.

It also cautioned that trade fragmentation could intensify, potentially damaging global output while driving prices upward.

The Fund urged governments worldwide to focus on restoring price stability, rebuilding fiscal buffers, and pursuing structural reforms aimed at strengthening energy security, improving readiness for AI adoption, and reinforcing international cooperation.