IMF
IMF warns rising essential goods prices could deepen poverty, food insecurity in Nigeria
The International Monetary Fund has cautioned that rising prices for essential goods could worsen poverty and food insecurity in Nigeria, despite recent improvements in the country’s macroeconomic stability.
The warning came in the IMF’s July 2026 World Economic Outlook Update, which projected Nigeria’s economy would grow by 4.1% in 2026 and 4.3% in 2027, while noting that higher costs for basic necessities could offset some benefits of ongoing reforms.
According to the report released Wednesday, Nigeria continues to benefit from improved macroeconomic conditions and favorable terms of trade, but households remain vulnerable to rising living costs.
“Nigeria is supported by improved macroeconomic stability and favourable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity,” the report stated.
The IMF said growth across sub-Saharan Africa is expected to remain broadly stable at 4.3% in 2026, though performance will vary widely depending on policy choices, reform implementation, and exposure to external shocks.
Oil-importing and non-resource-intensive economies in the region are likely to suffer more from rising energy and food prices, while some larger economies have benefited from earlier stabilization efforts despite weaker official development assistance and missing out on much of the AI-driven global tech boom.
The Fund kept its 2026 growth forecast for Nigeria unchanged at 4.1% from its April outlook and projected a further rise to 4.3% in 2027.
Globally, the IMF projected growth of 3.0% in 2026 and 3.4% in 2027, down from an average of 3.5% in 2024 and 2025. It attributed the slowdown to the economic fallout from the Middle East war, though stronger technology investment driven by AI advances was expected to partly offset the impact.
The IMF also warned that inflationary pressures have intensified following higher energy prices. “Global headline inflation is expected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before declining to 3.9 percent in 2027,” it said, adding that the recent projections suggest “the disinflation trend in place since the beginning of 2024 has stalled.”
According to the IMF, renewed geopolitical tensions remain the biggest downside risk to the global economy. “The possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions.”
The report projected that higher energy costs would continue to feed into food prices. It estimated crude oil prices would rise by 32% in 2026 compared to 2025 levels, with natural gas prices up 22%, fertilizer prices up 26%, and food prices expected to increase by 8% due to higher energy, transport, and fertilizer costs.
The IMF further cautioned that food insecurity could deteriorate if disruptions in energy and fertilizer markets persist. “Food insecurity could worsen materially if disruptions in fertilizer and energy markets intensify or linger, especially in low-income countries in South Asia and sub-Saharan Africa, whose food supply is provided largely by smallholder farmers unable to outbid competitors from wealthier nations.”
The Fund advised governments to avoid broad-based fuel subsidies, tax cuts, and price controls, arguing such measures are expensive and poorly targeted.
Instead, it recommended temporary, targeted support for vulnerable households while maintaining policies aimed at restoring price stability.
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