By Emmanuel Enitan
The International Monetary Fund (IMF) has raised Nigeria’s economic growth forecast for 2026 to 4.2 per cent from 4.1 per cent, but warned that rising food and energy costs continue to deepen hardship for households, highlighting the gap between improving macroeconomic indicators and the living conditions of many Nigerians.
In its October 2026 World Economic Outlook (WEO), released yesterday at the ongoing IMF/World Bank Annual Meetings in Bangkok, Thailand, the Fund projected Nigeria’s economy to expand by 4.3 per cent in 2027, while attributing the near-term outlook partly to improved macroeconomic stability and favourable terms-of-trade effects. <Cite refs={[“turn295134view1″,”turn295134view2”]} />
However, the improved growth projection came with a warning that higher prices of essential goods could aggravate poverty and food insecurity, particularly among vulnerable households whose incomes have struggled to keep pace with the cost of living.
Speaking at a briefing on the report, Deniz Igan, chief of the IMF Research Department’s World Economic Studies Division, said the Fund was mindful that Nigerians were suffering, especially from pressure on food security.
“While the growth held up in Nigeria, given energy exporter, poverty rates are still very high,” Igan said, urging policymakers to balance immediate household needs with the need to preserve medium-term economic stability. <Cite refs={[“turn295134view1″,”turn295134view2”]} />
She advocated targeted and temporary cash transfers or income support for the most vulnerable households, arguing that relief measures should address the immediate impact of rising food and energy prices without undermining the country’s fiscal position.
The IMF’s assessment underscores a central challenge facing Nigeria’s economic recovery: stronger aggregate output does not automatically translate into improved purchasing power, lower household expenses or reduced poverty.
While the country’s position as an energy exporter could benefit from favourable commodity-price movements, higher energy costs can also feed into domestic transport, production and distribution expenses, placing additional pressure on households and businesses.
The Fund said higher prices for essential goods were expected to worsen poverty and food insecurity, making the design of government support measures critical to ensuring that the benefits of economic growth reach more Nigerians.
Igan said policymakers needed to address food and energy security while maintaining medium-term stability, pointing to the need for carefully targeted interventions rather than measures that could create additional fiscal pressures. <Cite refs={[“turn295134view1″,”turn295134view2”]} />
The latest forecast represents a modest improvement in the IMF’s assessment of Nigeria’s growth prospects. The 4.2 per cent projection for 2026 is 0.1 percentage point higher than its previous estimate, while the 2027 outlook remains at 4.3 per cent.
Yet the Fund’s warning suggests that the quality and distribution of growth remain as important as its headline rate. For households facing elevated prices of basic goods, the economic recovery will be judged less by revised forecasts than by whether incomes, employment opportunities and access to essential needs improve.
The IMF’s latest outlook also comes amid wider concerns about global inflation and economic resilience. It projects global economic growth of 3.1 per cent in 2026, before an improvement to 3.4 per cent in 2027. Global inflation is expected to rise to 4.7 per cent this year, from 4.1 per cent in 2025, largely reflecting higher food and energy prices, before easing to 4.1 per cent next year. <Cite refs={[“turn890704news19″,”turn295134view1”]} />
For Nigeria, the challenge is to sustain growth while limiting the effect of price shocks on household welfare. The IMF’s recommendation for targeted, temporary income support places renewed emphasis on how fiscal policy can protect vulnerable people without reversing gains in macroeconomic stability.
The implication is that an improved growth forecast, on its own, offers limited reassurance to households still struggling with the cost of food, energy and other essentials. The extent to which the recovery becomes meaningful will depend on whether economic expansion is accompanied by practical relief for vulnerable Nigerians and more durable improvements in living standards.
