The International Monetary Fund has lowered Nigeria’s economic growth projection for 2026 to 4.1 percent, citing ongoing fallout from the Middle East conflict that has driven up energy and commodity prices across the region.
The revision was announced during the IMF and World Bank Spring Meetings in Washington, D.C., where officials highlighted how war-related supply shocks are undermining recovery in energy-importing economies. IMF Chief Economist Pierre-Olivier Gourinchas said the downgrade reflects mounting pressures on countries reliant on imported fuel, with Nigeria particularly vulnerable to higher shipping and fertilizer costs.
“Across Sub-Saharan Africa, we are seeing some downgrade of growth and an uptick in inflation in a number of countries,” Gourinchas said. “The impact is very much along the lines of what we see more broadly—especially for countries that are energy importers.”
Denz Igan, head of the IMF’s World Economic Studies Division, noted that while higher oil prices provide some offset, the net effect is weaker growth in 2026. “War-related higher fuel and fertilizer prices and increased shipping costs are going to weigh on non-oil activity in Nigeria,” Igan said. “There is some offset from higher oil prices, but the balance is weaker growth this year, with some recovery expected in 2027.”
The Fund projects that median inflation in Sub-Saharan Africa will rise from 3.4 percent in 2025 to 5 percent in 2026, driven by elevated oil and fertilizer prices, potential fuel shortages, and rising logistics costs. For Nigeria, officials stressed that tight monetary policy will be crucial to meeting the central bank’s inflation targets.
The IMF also warned that bilateral aid to Sub-Saharan Africa has fallen by 16 to 20 percent in 2025, eroding a key buffer as commodity and shipping costs surge.
Officials said the Fund is coordinating with the International Energy Agency and the World Bank to monitor energy market disruptions and assess country-level needs in the current environment.
