IMF upgrades Nigeria’s 2026 growth outlook to 4.4%

The International Monetary Fund (IMF) has upgraded its growth forecast for Nigeria to 4.4 per cent in 2026, citing improved macroeconomic conditions and reform momentum.

The Fund disclosed this in its January 2026 World Economic Outlook (WEO) Update, titled “Global Economy: Steady amid Divergent Forces,” released yesterday.

According to the IMF, Nigeria’s economy is expected to maintain a steady expansion path, rising from 4.1 per cent in 2024 to 4.2 per cent in 2025, before accelerating to 4.4 per cent in 2026. The new estimate represents a 0.2 percentage point upward revision from the Fund’s October 2025 projection.

Regional and global outlook

The IMF said Nigeria’s improved outlook mirrors a broader pickup across sub-Saharan Africa, where growth is projected to reach 4.6 per cent in 2026 and 2027. The Fund attributed the regional performance to “macroeconomic stabilisation and continued reform efforts” across key economies.

At the global level, the IMF projected growth of 3.3 per cent in 2026, noting that the world economy remains resilient despite persistent uncertainties. The outlook, the Fund said, reflects a “balancing of divergent forces,” as the negative effects of changing trade policies are being offset by rising investment in technology and artificial intelligence (AI).

Commodity prices and downside risks

For Nigeria, the IMF identified energy prices as a critical factor shaping the 2026 outlook. The Fund projected that “energy commodity prices are expected to decline by about 7 per cent in 2026,” largely due to weak global demand.

However, the report noted that oil prices are being supported by what it described as a “soft price floor,” driven by coordinated production management by OPEC+ and crude stockpiling by China, helping to limit downside pressures.

Despite the improved forecast, the IMF warned that “risks to the outlook remain tilted to the downside.” These risks include: “Escalating geopolitical tensions” in the Middle East and Ukraine, with potential spillovers to supply chains;
“Renewed trade tensions and protectionist measures,” which could heighten global uncertainty, and “High public debt and fiscal deficits,” capable of exerting upward pressure on long-term interest rates.

Policy direction

To sustain growth, the IMF urged Nigerian authorities to focus on “rebuilding fiscal buffers” and pressing ahead with “structural reforms without delay.”

The Fund stressed that “central bank independence remains critical for macroeconomic stability,” especially amid heightened global volatility. It also cautioned that any “discretionary fiscal support should be well-targeted and include clear sunset provisions” to ensure such measures remain temporary.

The IMF concluded that Nigeria’s ability to meet its 2026 growth target will depend on the “consistent implementation of reforms” and the country’s capacity to withstand domestic and external shocks as the global economy continues to adjust.