By Chibuzor Alli
Nigeria’s economic recovery may be gaining momentum, but rising food and essential commodity prices continue to threaten the living conditions of vulnerable households, the International Monetary Fund has warned.
In its October 2026 World Economic Outlook, titled Resilience Under Strain, Urgent Choices, the IMF said improvements in macroeconomic stability and favourable trade conditions had supported the country’s outlook, but had not removed the risk of worsening poverty and food insecurity.
“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 Fund stated.
The warning highlights a key challenge for Nigeria: stronger economic indicators do not necessarily mean households can afford food, energy and other basic necessities.
Growth forecasts improve, but household pressures remain
The IMF projected Nigeria’s economy to grow by 4.2 per cent in 2026, up from an estimated 4.0 per cent in 2025. Growth is expected to increase further to 4.3 per cent in 2027.
However, the improved outlook comes against the backdrop of persistent cost-of-living pressures, which continue to threaten the welfare of households with limited financial resources.
Nigeria is among the larger sub-Saharan African economies benefiting from earlier stabilisation measures and economic reforms. Nevertheless, the IMF noted that countries across the region remain exposed to commodity price volatility, climate-related shocks and restricted access to external financing.
The Fund projected sub-Saharan Africa’s economic growth at 4.5 per cent in 2026, while cautioning that the regional figure conceals significant differences between countries.
“Growth in sub-Saharan Africa is expected to remain stable at 4.5 per cent in 2026, though this masks some substantial divergence across countries.”
According to the IMF, some larger economies have benefited from previous reforms and improved economic conditions, while oil-importing and non-resource-intensive countries face greater pressure from higher food and energy costs.
Stronger external position may not ease the cost of living
Nigeria’s external accounts are also expected to strengthen in 2026, according to the IMF projections.
The country’s current account surplus is forecast to rise to 7.0 per cent of gross domestic product in 2026, compared with 4.8 per cent in 2025, before moderating to 4.4 per cent in 2027.
The projected increase suggests a stronger external position this year, supported in part by favourable terms of trade. However, improvements in external balances do not automatically translate into lower prices or increased purchasing power for households.
For families already struggling with the cost of food and other necessities, the immediate concern remains whether economic gains will improve their ability to meet everyday expenses.
The IMF also identified declining official development assistance and limited participation in the global artificial intelligence investment boom as challenges facing several African economies.
Global tensions pose fresh risks
The Fund warned that geopolitical tensions, rising food and energy prices, and tighter global financing conditions could undermine growth, particularly in developing economies.
It said, “Risks are skewed to the downside,” pointing to the possibility of a prolonged conflict in the Middle East and further disruptions to energy infrastructure as threats to global economic stability.
Such developments could place additional pressure on countries vulnerable to fluctuations in international commodity prices and financing costs.
For Nigeria, renewed increases in global energy and food prices could complicate efforts to maintain economic stability while protecting households from further financial strain.
IMF urges targeted support for vulnerable Nigerians
To limit the impact of economic shocks on low-income households, the IMF recommended temporary financial assistance targeted at those most in need.
Rather than relying on broad support measures that could weaken public finances, the Fund urged governments to focus assistance on vulnerable populations and improve social protection systems.
It said governments should “rely primarily on temporary, targeted income support for the most vulnerable,” while strengthening mechanisms to respond more effectively to future economic shocks.
The recommendation places social protection at the centre of efforts to ensure that economic stabilisation does not leave the poorest households exposed to rising living costs.
Poverty figures reinforce concerns over household welfare
The IMF’s warning comes amid separate findings on Nigeria’s multidimensional poverty levels.
PUNCH Online earlier reported that Nigeria recorded the world’s largest increase in the number of people living in multidimensional poverty, with an additional 17.9 million Nigerians falling into poverty between 2021 and 2024, according to the 2026 Global Multidimensional Poverty Index.
The report, published by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative, indicated that Nigeria had experienced a reversal in poverty reduction after recording improvements between 2018 and 2021.
Afghanistan recorded the next-largest increase among the countries cited, with 5.3 million additional people living in poverty during its latest assessment period.
Together, the poverty findings and the IMF’s economic outlook underscore the challenge facing Nigeria: sustaining economic growth while ensuring that vulnerable households can withstand rising prices.
Although the country’s macroeconomic position is showing signs of improvement, the Fund’s assessment suggests that protecting household welfare and strengthening targeted social support remain important to making the recovery more inclusive.
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