Nigeria’s recovery hit as IMF lowers growth outlook over energy crisis
The International Monetary Fund has downgraded Nigeria’s economic growth forecast for 2026 to 4.1%, citing the widening fallout from the Middle East war and its impact on global energy and supply chains.
The revision was announced during the joint Spring Meetings of the IMF and the World Bank in Washington DC, where officials warned that war-induced shocks are undermining fragile recoveries across Sub-Saharan Africa.
The IMF’s chief economist, Pierre-Olivier Gourinchas, said the downgrade reflects mounting pressures on energy-importing economies, including Nigeria.
“On Sub-Saharan Africa, we are seeing some downgrade of growth, and we are seeing some uptick in inflation in a number of countries in the region,” he said.
“The impact is very much along the lines of what we see more broadly — for a lot of the countries, especially the ones that are energy importers.”
Gourinchas added that the Fund is working closely with affected countries to assess their needs, while coordinating with global institutions such as the International Energy Agency and the World Bank on disruptions in energy markets.
Further details were provided by Denz Igan, who said the 0.3 percentage point downgrade reflects competing economic forces.
“War-related higher fuel and fertiliser prices and higher shipping costs are going to weigh on non-oil activity in Nigeria,” she said. “There’s some offset coming from higher oil prices, but the net balance is weaker growth in 2026, with some recovery built in for 2027.”
The Fund also warned of rising inflationary pressures across the region. It projects that median inflation in Sub-Saharan Africa will increase from 3.4% in 2025 to 5% in 2026, driven by elevated oil and fertiliser prices, potential fuel shortages and higher logistics costs.
For Nigeria, the IMF said maintaining tight monetary policy would be critical to achieving the inflation target set by the central bank.
The outlook is further complicated by a sharp decline in external support. According to the Fund, bilateral aid to Sub-Saharan Africa fell by between 16% and 20% in 2025, removing a key buffer at a time of escalating commodity and shipping costs.