IMF cuts Nigeria’s 2026 growth outlook to 4.1%

By Abubakar Yunusa

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.
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