The International Monetary Fund has lowered Nigeria’s 2026 economic growth forecast to 4.1 percent from 4.4 percent, citing mounting external pressures and warning that higher oil prices will not be sufficient to offset the impact of global economic shocks.
The downward revision reflects a reassessment of Nigeria’s economic outlook amid rising geopolitical tensions, elevated energy costs and increasing global trade disruptions. All of which are expected to weigh on overall economic performance.
Although stronger crude oil prices are projected to support government revenue and provide some external buffer, the IMF noted that the net effect remains negative as higher fuel, fertiliser and logistics costs continue to pressure key sectors of the economy.
The Fund said the current global environment is creating a drag on growth, particularly for economies exposed to import costs and supply chain disruptions, even where oil revenues provide partial relief.
Rising input costs are expected to slow activity in non-oil sectors, including agriculture and manufacturing, where profitability is being squeezed by higher production expenses and weaker demand conditions.
The IMF also highlighted broader regional risks, noting that Sub-Saharan Africa faces weakening global growth, softer commodity prices outside oil and declining external support, factors that are expected to constrain economic expansion.
In addition, tightening financial conditions and rising borrowing costs are limiting access to capital, increasing fiscal pressure on emerging economies, including Nigeria.
On monetary policy, the IMF emphasised the need for a cautious and data-driven approach, particularly in managing inflation and exchange rate stability, as these remain key risks to macroeconomic stability.
Despite the near-term downgrade, the Fund expects some improvement in Nigeria’s growth outlook beyond 2026, supported by easing global pressures and ongoing domestic policy adjustments.