By Emmanuel Olugua
The International Monetary Fund (IMF) has acknowledged that President Bola Tinubu’s economic reforms have restored macroeconomic stability in Nigeria, but warned that the soaring cost of essential goods is pushing more Nigerians deeper into poverty and worsening food insecurity.
In its July 2026 World Economic Outlook Update, the IMF said Nigeria’s economy is expected to maintain a steady growth trajectory over the next two years, projecting Gross Domestic Product (GDP) growth of 4.1 per cent in 2026 and 4.3 per cent in 2027.
Despite the improved outlook, the global lender cautioned that the gains from recent economic reforms are being undermined by persistently high prices of food, energy, and other basic necessities, which continue to erode household incomes.
According to the IMF, while Nigeria has benefited from improved macroeconomic stability and favourable terms of trade, the rising cost of living remains a major threat to social welfare.
“Nigeria is supported by improved macroeconomic stability and favourable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity,” the report stated.
The IMF noted that growth across Sub-Saharan Africa is expected to remain relatively stable at 4.3 per cent in 2026, although performance will vary significantly among countries depending on their reform efforts, fiscal space, and exposure to external economic shocks.
It observed that oil-importing and non-resource-intensive economies remain particularly vulnerable to higher food and energy prices, while some larger African economies have continued to benefit from earlier economic stabilisation measures despite missing out on the rapid gains from the global artificial intelligence-driven technology boom.
For Nigeria, the Fund maintained that recent reforms have strengthened macroeconomic fundamentals, even as millions of citizens continue to struggle with the impact of inflation.
Beyond Nigeria, the IMF revised its outlook for the global economy, forecasting world economic growth of 3.0 per cent in 2026 and 3.4 per cent in 2027, down from the average 3.5 per cent recorded in 2024 and 2025.
The institution attributed the slower global expansion largely to the continuing conflict in the Middle East, although it said stronger demand generated by advances in artificial intelligence and related technologies has helped cushion the impact.
The IMF also warned that the global fight against inflation is far from over.
It projected headline inflation to rise from 4.1 per cent in 2025 to 4.7 per cent in 2026 before easing to 3.9 per cent in 2027, signalling that the earlier downward trend in inflation has stalled.
The report identified renewed geopolitical tensions in the Middle East as one of the biggest threats to global economic recovery, warning that any escalation could trigger fresh disruptions in commodity markets and global supply chains, leading to higher prices and tighter financial conditions.
The Fund also warned that increasing trade fragmentation could weaken global output while adding further pressure on prices.
To sustain growth and strengthen resilience, the IMF urged governments across the world to restore price stability, rebuild fiscal buffers and accelerate structural reforms aimed at improving energy security, enhancing preparedness for the artificial intelligence revolution and deepening international economic cooperation.