The International Monetary Fund (IMF) has lowered Nigeria’s economic growth projection for 2026 to 4.1%, down from its earlier estimate of 4.4%, citing a combination of global shocks and domestic cost pressures.
The revision, a 0.3 percentage point downgrade, was disclosed during a media briefing marking the release of the IMF’s April 2026 Global Financial Stability Report. While the new forecast is below the January projection, it remains slightly above the Fund’s October 2025 outlook.
Explaining the adjustment, Deniz Igan, Deputy Chief of the Macro-Financial Division in the IMF’s Research Department, said the relatively strong momentum recorded across Sub-Saharan Africa in 2025 has weakened due to fresh global disruptions.
She noted that ongoing geopolitical tensions have dampened global growth, softened non-oil commodity prices, and worsened terms of trade—particularly for oil-importing economies—creating uneven outcomes across the region.
Igan also highlighted a sharp decline in foreign aid flows, with bilateral support dropping between 16% and 28% in 2025, a trend expected to persist and further strain vulnerable economies.
For Nigeria, the IMF said the downgrade reflects a delicate balance between rising input costs and supportive oil prices. Higher fuel, fertilizer, and shipping costs are projected to weigh on non-oil sector activity, partially offset by gains from elevated crude oil prices.
On inflation and monetary policy, the Fund stressed the need for continued tight policy measures, alongside close monitoring of exchange rate movements and inflation expectations.
Nigeria’s inflation rate stood at about 15.06% year-on-year as of February 2026, while the benchmark interest rate remains high at 26.50%, underscoring ongoing efforts by the central bank to rein in price pressures.
Overall, the IMF expects these headwinds to constrain growth in 2026, with a modest recovery anticipated in 2027.
Globally, growth is projected to slow from 3.4% in 2025 to 3.1% in 2026, before edging up to 3.2% in 2027. Advanced economies are expected to see a gradual slowdown, while emerging markets present a mixed outlook.
Among major economies, India is forecast to lead with a 6.5% growth rate in 2026. The United States is expected to remain relatively resilient at 2.3%, while the United Kingdom is projected to grow by 0.8%. Germany is also set for a modest recovery, rising to 0.8% in 2026.
In Africa, growth in Sub-Saharan Africa is projected to ease slightly from 4.5% in 2025 to 4.3% in 2026, before improving to 4.4% in 2027.
The IMF linked its latest projections to escalating tensions in the Middle East, particularly around the Strait of Hormuz, a critical global oil corridor. Disruptions in the region have driven up energy prices, increased shipping and insurance costs, and intensified uncertainty in global markets.
These pressures have strained supply chains and pushed up the cost of key inputs such as fuel and fertilizer—factors that disproportionately impact import-dependent economies like Nigeria—ultimately feeding into slower growth, higher inflation, and worsening trade conditions.
