IMF cuts Nigeria’s 2026 growth forecast to 4.1% amid Middle East conflict shocks

The International Monetary Fund has downgraded Nigeria’s economic growth projection for 2026 to 4.1%, attributing the revision to higher fuel and fertilizer prices and increased global shipping costs resulting from the ongoing Middle East crisis.

The updated forecast represents a 0.3 percentage point reduction from the 4.4% estimate released in January. The adjustment was published in the IMF’s April 2026 World Economic Outlook, unveiled during the IMF/World Bank 2026 Spring Meetings in Washington DC.

The IMF said Nigeria’s outlook is being shaped by rising global uncertainty and external shocks from the conflict. Although the economy is still expected to grow at a moderate pace, the institution warned that elevated import, transport, and input costs may restrain economic performance.

Globally, the IMF also revised growth downward, projecting world output at 3.1% in 2026 compared to 3.4% in 2025, citing war-related disruptions to economic activity.

At the report briefing, IMF Research Department Director Pierre-Olivier Gourinchas said Sub-Saharan Africa is experiencing broad downward revisions:

“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.”

For Nigeria, IMF official Deniz Igan stated:

“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 also stressed monetary policy discipline:

“maintaining tight monetary policy, remaining data-dependent, and closely monitoring exchange rate movements and inflation expectations will be crucial to achieving the inflation target.

The report further highlighted regional headwinds, including declining foreign aid, rising inflation, and worsening trade conditions, with Sub-Saharan Africa’s median inflation projected to increase from 3.4% in 2025 to 5%.

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