•Cites, higher fuel, fertiliser prices, increased shipping costs
By Babajide Komolafe, Economy Editor
The International Monetary Fund (IMF) has lowered its growth forecast for Nigeria’s economic growth to 4.1 percent in 2026, citing higher fuel, fertilizer prices and increased shipping costs triggered by the impact of the ongoing Middle East crisis.
The latest forecast for Nigeria represents 0.3 percentage point lower than the 4.4 per cent earlier projected in January by the IMF.
The downgrade was contained in the April 2026 edition of the IMF’s World Economic Outlook, released on the sidelines of the ongoing IMF/ World Bank 2026 Spring Meetings in Washington DC.
The report showed that Nigeria’s growth projection reflects mounting global uncertainties and external shocks triggered by the crisis.
While the Nigerian economy is still expected to maintain moderate expansion, the IMF warned that rising costs of goods, transportation, and imported inputs could weigh on output. The IMF also cut its global growth forecast, projecting world output to slow to 3.1 percent in 2026 from 3.4 percent in 2025, as the war-induced disruptions dampen economic momentum across regions.
Speaking at the launch of the report Economic Counsellor and Director, Research Department, IMF, Pierre-Olivier Gourinchas, noted that across sub-Saharan Africa, growth projections had been downgraded as the impact of cutting of aids to the region is compounded by the impact of the war.
“In Sub-Saharan Africa, we are seeing, broadly, a downgrade in growth and rising inflation in a number of countries in the region. The impact is largely in line with global trends. For many countries, especially energy importers, the situation is challenging, although there are also energy exporters in the region, so the impact varies.” He stated.
For Nigeria, Division Chief, Research Department, at the IMF, Deniz Igan noted that for Nigeria, “growth has been revised down by 0.3 percentage points to 4.1% in 2026. This reflects two opposing forces. On one hand, higher fuel and fertilizer prices and increased shipping costs are expected to weigh on non-oil activity.
“On the other hand, higher oil prices provide some offset. Overall, the balance is negative for growth in 2026, with some recovery expected in 2027.”
She noted that “maintaining tight monetary policy, remaining data-dependent, and closely monitoring exchange rate movements and inflation expectations will be crucial to achieving the inflation target.
“In spite of the gains from the current high oil prices triggered by the war in the Middle East, Nigeria’s growth projections have been revised downwards by 0.3 per cent to 4.1 per cent in 2026 by the International Monetary Fund.
On sub-Saharan Africa, Igan noted that 2025 was relatively strong for the region. “Before the war, global growth was resilient, oil prices were strong, and external financial conditions were supportive. This helped countries in the region.
“However, with the war, global growth has slowed, non-oil commodity prices have softened, and terms of trade have worsened for oil importers. This creates variation in impact across the region. In addition, Sub-Saharan Africa is facing significant headwinds from declining foreign aid. Bilateral aid cuts range from 16% to 28% in 2025, and we expect this trend to continue.
“In terms of impact, growth has been downgraded by 0.4 percentage points cumulatively for 2026 and 2027. At the same time, median inflation in Sub-Saharan Africa is projected to rise from 3.4% in 2025 to 5%. This reflects high oil and fertilizer prices, potential fuel shortages, and rising borrowing costs. Fertilizer prices are a particular concern due to the region’s dependence on agriculture and existing food insecurity.
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