Fuel, shipping costs push Nigeria’s growth outlook lower – IMF

The International Monetary Fund (IMF) has reduced Nigeria’s economic growth forecast for 2026. It now expects the economy to grow by 4.1%, down from the earlier estimate of 4.4%.

The IMF explained that both global and local challenges caused the downgrade. These include rising costs, global conflicts, and weaker conditions in international markets.

Why the forecast was reduced

According to the IMF:

Higher fuel, fertilizer, and shipping costs are slowing down non-oil sectors in Nigeria.

Global tensions, especially in oil-producing regions, are affecting prices and trade.

Reduced foreign aid is also putting pressure on developing countries, including those in Africa.

Although oil prices have gone up, helping Nigeria slightly, the increase in costs is affecting overall economic activity.

Inflation and monetary policy

Nigeria’s inflation is about 15.06%.

The Central Bank’s interest rate remains high at 26.5% to control prices.

The IMF says tight monetary policies are still needed to manage inflation and stabilize the economy.

Global outlook

The IMF also warned that the global economy is slowing:

World growth is expected to fall from 3.4% in 2025 to 3.1% in 2026.

Many major economies, including the US, UK, and Germany, are expected to grow slowly.

India is still expected to grow strongly at 6.5%.

In Sub-Saharan Africa, growth is expected to slow slightly before improving again in 2027.

Key takeaway

Nigeria’s economy is still expected to grow, but at a slower pace than earlier predicted. The IMF says high costs, global instability, and inflation are the main reasons for the weaker outlook.