The International Monetary Fund (IMF) has downgraded Nigeria’s economic growth forecast for 2026 to 4.1 per cent, citing disruptions linked to the ongoing conflict in the Middle East and its ripple effects on global energy markets.
The revised projection was revealed in the April 2026 Global Financial Stability Report, released on Tuesday. The new forecast is slightly lower than the 4.4 per cent growth estimate made in January 2026, though it remains marginally higher than the outlook issued in October 2025.
According to the IMF, Nigeria’s economic momentum will remain relatively steady despite several emerging challenges.
“In Nigeria, growth momentum is sustained at 4.1 percent in 2026, supported by improved macroeconomic stability and positive terms-of-trade effects, while higher goods and transport costs are headwinds. Growth is expected to strengthen in 2027 to 4.3 percent as these headwinds ease,” the report stated.
The downgrade was discussed during the presentation of the report at the IMF and World Bank Spring Meetings in Washington, D.C., where officials warned that escalating geopolitical tensions are slowing global recovery.
The IMF’s Chief Economist, Pierre-Olivier Gourinchas, said the revision reflects broader economic pressures affecting several developing economies, particularly those that rely heavily on energy imports.
“On Sub-Saharan Africa, we are seeing some downgrade of growth, and we are seeing some uptick in inflation in a number of countries in the region,” Gourinchas said.
“The impact is very much along the lines of what we see more broadly — for a lot of the countries, especially the ones that are energy importers.”
He added that the Fund is closely monitoring economic conditions across affected countries and is engaging with them to determine potential support needs.
“We are following with a number of countries what their needs may be in the current environment,” he said, noting that the IMF is coordinating with the International Energy Agency and the World Bank to assess the impact of energy market disruptions.
Further explaining the downgrade, Denz Igan, Chief of the IMF Research Department’s World Economic Studies Division, said Nigeria’s economic outlook is being shaped by both positive and negative pressures.
According to him, rising fuel and fertilizer prices, as well as higher shipping costs driven by war-related disruptions, are expected to slow non-oil economic activity in the country.
“War-related higher fuel and fertilizer prices and higher shipping costs are going to weigh on non-oil activity in Nigeria,” Igan said.
“There’s some offset coming from higher oil prices, but the net balance is weaker growth in 2026, with some recovery built in for 2027.”
The IMF also warned that inflationary pressures are likely to intensify across Sub-Saharan Africa.
The Fund projects that median inflation in the region will increase from 3.4 per cent in 2025 to about 5 per cent in 2026, largely driven by rising energy prices, fertilizer costs, potential fuel shortages, and increasing logistics expenses.
To manage these pressures, the IMF stressed the importance of maintaining tight monetary policy in Nigeria.
It noted that such measures would be crucial for achieving the Central Bank’s inflation target and maintaining macroeconomic stability.
Additionally, the report highlighted a decline in financial support to the region, noting that bilateral aid to Sub-Saharan Africa dropped by between 16 and 20 per cent in 2025.
This reduction, the IMF said, has weakened fiscal buffers at a time when many countries are grappling with rising commodity prices and increasing shipping costs.
