BREAKING: IMF raises Nigeria’s growth forecast to 4.2%, acknowledges Nigerians are suffering

The International Monetary Fund (IMF) has raised Nigeria’s economic growth forecast for 2026 to 4.2%, while projecting growth of 4.3% in 2027.

The projections were presented in the IMF’s 2026 World Economic Outlook, titled “Resilience Under Strain, Urgent Choices,” in Bangkok, Thailand, with the report presented by IMF Director of Research Silvana Tenreyro.

The 2026 forecast represents an upward revision of 0.1 percentage point, while the projection for 2027 remains unchanged.

The IMF also called for immediate relief from rising food and energy costs stating that they are mindful that Nigerians are suffering.

Nigeria’s growth outlook improves

The IMF attributed Nigeria’s growth outlook to improved macroeconomic stability and favourable terms of trade. However, it warned that higher prices for essential goods could worsen poverty and food insecurity.

• “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 institution’s outlook comes as Nigeria continues economic reforms introduced over the past three years. The reforms have attracted praise for their boldness but have also imposed costs on Nigerians through increased poverty and weakened purchasing power.

Globally, the IMF expects growth to slow to 3.1% in 2026 before recovering to 3.4% in 2027. Tenreyro said the global economy remained resilient, although that resilience was weakening.

• “The global economy has been resilient, but that resilience is under strain, with risks tilted to the downside. Global activity is projected to grow by 3.1% this year, 40 basis points lower than last year, and it is forecast to rise by 3.4% in 2027.”

War-related increases in energy and commodity prices are raising inflation and slowing activity, while AI-driven investment is supporting trade, demand and growth but also adding to price pressures.

The IMF projects global headline inflation to rise to 4.7% in 2026 before easing to 4.1% in 2027.

IMF urges targeted cash transfers

Responding to a question from Nigerian journalist Nancy Nnaji, IMF Research Department Division Chief Deniz Igan urged policymakers to provide immediate relief from rising food and energy costs. She said this support should avoid undermining longer-term economic stability.

• “What we are advocating for is for policymakers to balance the near-term needs of the population, including food security and energy security, given that the prices of food and energy are increasing disproportionately, while also keeping in mind medium-term stability.”
• “Nigeria is a good example. While growth held up in Nigeria, given that it is an energy exporter, power pressures are still very high, and we are mindful that the population is suffering, especially when it comes to food security, which also faces risks from El Niño.
• In that environment, what we are advocating for is cash transfers and targeted, temporary income support for the most vulnerable households in Nigeria. That can alleviate high poverty and help ensure food security.”

Igan recommended temporary, targeted cash transfers to help Nigeria’s most vulnerable households manage rising food and energy prices.

She said the assistance should remain fiscally sustainable through better government spending and stronger revenue collection.

The recommendation comes amid pressure from opposition presidential aspirants Atiku Abubakar and Peter Obi for the Tinubu administration to restore elements of petrol subsidies to ease hardship.

World Bank forecasts stronger Nigerian growth

The World Bank last week raised Nigeria’s 2026 growth forecast to 4.3%, compared with growth of 4.0% in 2025. It projected annual growth of 4.4% in both 2027 and 2028.

• The lender attributed the stronger outlook to improving macroeconomic stability, strengthening investor confidence, and a gradual recovery in private investment.
• Growth forecasts were upgraded for nearly three-quarters of Sub-Saharan African countries.
• According to the National Bureau of Statistics, Nigeria’s real GDP grew by 4.43% year-on-year in the second quarter of 2026, compared with 4.23% in the corresponding quarter of 2025.

Meanwhile, the Tinubu administration announced a 30-day discount window on petrol sold by NNPC Limited, prioritising public transporters nationwide.

Finance Minister Taiwo Oyedele denied that the measure represented a partial return of subsidies, saying it was funded entirely from the retailer’s margins, rather than the federal budget or Federation Account.

Critics have challenged that explanation, arguing that the administration has responded to opposition pressure by bringing back subsidies.