The International Monetary Fund (IMF) has cut Nigeria’s economic growth forecast for 2026 by 0.3 percentage points, lowering it from 4.4% to 4.1%, citing mounting global and domestic pressures.
The IMF disclosed this during a media briefing for the launch of its April 2026 Global Financial Stability Report, monitored by Nairametrics.
This latest outlook is lower than the 4.4% projection made in January 2026, though it remains slightly higher than the forecast released in October last year.
What they are saying
Explaining the downgrade, Deniz Igan, Deputy Chief of the Macro-Financial Division in the IMF’s Research Department, said the relatively strong economic performance seen in Sub-Saharan Africa in 2025 has weakened amid fresh global shocks, particularly the ongoing war, which has disrupted non-oil commodity markets and worsened conditions for oil-importing countries.
- “With the war, however, global growth has weakened, non-oil commodity prices have softened, and terms of trade have worsened for oil importers—an important source of variation across the region,” she said.
She further noted that declining foreign aid is adding pressure across the region, with bilateral support dropping by as much as 16% to 28% in 2025, a trend expected to persist.
For Nigeria specifically, the IMF said the downgrade reflects rising costs and mixed economic signals, as higher fuel, fertilizer, and shipping costs weigh on non-oil sectors, even as elevated oil prices provide some support.
- “Turning to Nigeria, we have revised growth down by 0.3 percentage points to 4.1 per cent in 2026. This reflects a balance of two forces: higher fuel and fertilizer prices, along with increased shipping costs, which are expected to weigh on non-oil activity, and some offset from higher oil prices.”
On inflation, the Fund emphasized the need for tight monetary policy and careful monitoring of exchange rates and inflation expectations.
Nigeria’s inflation stood at around 15.06% year-on-year as of February 2026, while the benchmark interest rate remained elevated at 26.50%, reflecting ongoing efforts by the central bank to stabilize prices.
- “Overall, the balance is expected to weigh on growth in 2026, with some recovery projected in 2027,” she said.
More insights
The IMF’s projections show a broader slowdown in global growth, with world output expected to decline from 3.4% in 2025 to 3.1% in 2026, before a slight recovery to 3.2% in 2027.
- Advanced economies are projected to grow more slowly, easing from 1.9% in 2025 to 1.8% in 2026 and 1.7% in 2027. The United States is expected to remain relatively resilient, with growth at 2.3% in 2026, while the United Kingdom’s economy is projected to grow at 0.8%.
- Germany, Europe’s largest economy, is expected to recover modestly from 0.2% in 2025 to 0.8% in 2026, and then grow to 1.2 the following year.
Among major economies, India stands out with the strongest growth outlook at 6.5% in 2026, but is projected to remain the same next year, while some of the weakest performances are seen in countries like South Africa, projected to grow by just 1.0% in 2026.
Sub-Saharan Africa is expected to see growth slow slightly from 4.5% in 2025 to 4.3% in 2026, before picking up to 4.4% in 2027, reflecting both global pressures and domestic structural challenges.
What you should know
The IMF’s revised projections are closely tied to escalating tensions in the Middle East, particularly around the Strait of Hormuz, a critical global oil transit route. Disruptions in the region, including attacks on oil infrastructure, have driven up energy prices and heightened uncertainty in global markets.
These developments have increased shipping and insurance costs, strained supply chains, and contributed to higher fuel and fertilizer prices—factors that disproportionately affect developing economies like Nigeria.
As a result, countries dependent on imports, especially for energy and agricultural inputs, are facing worsening trade conditions, rising inflation, and slower economic growth, all of which are reflected in the IMF’s latest outlook.
