IMF cuts Nigeria’s 2026 growth forecast to 4.1% over Middle East crisis

The International Monetary Fund has downgraded Nigeria’s economic growth projection to 4.1 per cent for 2026, citing rising fuel and fertiliser prices, as well as increased shipping costs linked to the ongoing Middle East crisis.

 

The revised figure, contained in the April 2026 World Economic Outlook released during the IMF/World Bank Spring Meetings in Washington DC, represents a 0.3 percentage point drop from the 4.4 per cent forecast issued in January.

 

The IMF said the downgrade reflects mounting global uncertainties and external shocks, warning that higher costs of goods, transportation and imported inputs could weigh on Nigeria’s output despite expectations of moderate expansion.

 

Economic Counsellor and Director of the IMF’s Research Department, Pierre-Olivier Gourinchas, noted that the impact of the crisis is being felt across sub-Saharan Africa, with growth projections weakening and inflation rising.

 

“In Sub-Saharan Africa, we are seeing, broadly, a downgrade in growth and rising inflation in a number of countries in the region,” he said. “For many countries, especially energy importers, the situation is challenging.”

 

Also speaking, IMF Division Chief, Deniz Igan, explained that Nigeria’s outlook reflects competing economic forces.

 

“Growth has been revised down by 0.3 percentage points to 4.1% in 2026. This reflects two opposing forces. On one hand, higher fuel and fertiliser prices and increased shipping costs are expected to weigh on non-oil activity. On the other hand, higher oil prices provide some offset,” she said.

 

“Overall, the balance is negative for growth in 2026, with some recovery expected in 2027.”

 

Igan added that maintaining tight monetary policy and closely monitoring inflation and exchange rate movements would be critical to stabilising the economy.

 

The IMF also downgraded global growth projections, forecasting world output to slow to 3.1 per cent in 2026 from 3.4 per cent in 2025, as geopolitical tensions continue to disrupt economic activity.

 

Across sub-Saharan Africa, the Fund projected a 0.4 percentage point cumulative downgrade for 2026 and 2027, alongside rising inflation expected to climb from 3.4 per cent in 2025 to about 5 per cent.

 

It warned that the region faces additional pressure from declining foreign aid, rising borrowing costs, and surging fertiliser prices—factors likely to deepen food insecurity and strain already fragile economies.

 

The latest outlook underscores growing concerns over Nigeria’s vulnerability to global shocks, even as oil price gains offer limited relief against broader economic pressures.