IMF Retains Nigeria’s 4.1% Growth Forecast for 2026

Nigeria has emerged as one of the steadier performers in an unsettled global economy, with the International Monetary Fund choosing to leave its growth forecast for the country untouched even as it trimmed expectations for much of the world. The Fund retained Nigeria’s growth forecast at 4.1 per cent for 2026, holding firm despite mounting pressures from war, energy shocks and an uneven technology boom.

The projection is contained in the IMF’s July 2026 World Economic Outlook Update, released on Wednesday under the title Global Economy in Crosscurrents of War and Technology. The report forecasts global growth to moderate from an estimated 3.5 per cent in 2025 to 3.0 per cent in 2026 before recovering to 3.4 per cent in 2027. For Nigeria, the outlook rises slightly to 4.3 per cent in 2027, attributed to improving macroeconomic stability and stronger terms of trade.

Those figures mark a mixed trajectory for Africa’s largest economy, which recorded growth of 4.1 per cent in 2024 before slowing to 3.0 per cent in 2025. The rebound now projected rests largely on Nigeria’s standing as an oil exporter at a moment when crude prices are climbing. The IMF assumes average crude oil prices of about $89 per barrel in 2026, a 32 per cent increase over 2025, driven by supply disruptions linked to tensions around the Strait of Hormuz.

Yet the Fund was careful to temper the optimism. It warned that rising prices of essential goods will deepen poverty and food insecurity in Nigeria despite the improved macroeconomic backdrop. The Division Chief in the IMF’s Research Department, Deniz Igan, captured the trade off in her remarks accompanying the release.

“Nigeria is expected to grow at 4.1 per cent, quite stable, and this is supported by improved macroeconomic stability and favourable terms of trade, with Nigeria being an oil exporter,” she said, adding that “higher prices for essentials are expected to aggravate poverty and food insecurity.”

Igan also flagged a threat that goes beyond fuel.

“What matters also is the increase in fertiliser prices that we have seen, and this is coinciding with the planting season in some countries, and it may hurt the agricultural sector,” she said.

The IMF expects fertiliser prices to rise by 26 per cent, natural gas by 22 per cent and global food prices by 8 per cent in 2026.

The regional picture is one of divergence. Sub-Saharan Africa is expected to record growth of 4.3 per cent in 2026 and 4.5 per cent in 2027, though the average conceals wide gaps. Oil importing, non resource intensive economies are set to be hit hardest by higher food and energy prices, while some larger economies continue to benefit from earlier stabilisation and reform efforts. South Africa, by contrast, is projected to expand by just 1.1 per cent.

The domestic backdrop remains delicate. Nigeria’s headline inflation rose to 15.93 per cent in May 2026, its third consecutive monthly increase, though far below the 26.06 per cent recorded a year earlier, according to the National Bureau of Statistics. The Central Bank retained its Monetary Policy Rate at 26.5 per cent at its May meeting.

Globally, the disinflation story has stalled. Global headline inflation is expected to climb from 4.1 per cent in 2025 to 4.7 per cent in 2026 before easing to 3.9 per cent in 2027. Even so, the IMF noted that the modest slowdown reflects the effects of the Middle East war being partly offset by accelerated momentum in the global technology cycle, thanks to advances in artificial intelligence and its adoption.