THUR JULY 09 2026-theGBJournal| Nigeria’s economy is projected to expand by 4.1% in 2026 and 4.3% in 2027, outpacing the broader sub-Saharan African region as improved macroeconomic stability and favourable terms-of-trade effects support growth, according to the International Monetary Fund’s (IMF) latest World Economic Outlook Update released on Wednesday.
The Fund, however, warned that higher prices for essential goods are expected to further aggravate poverty and food insecurity, underscoring the uneven impact of the country’s economic recovery.
The IMF said Nigeria’s growth outlook will be supported by improved macroeconomic stability and favourable terms-of-trade effects over the forecast period.
However, it cautioned that rising prices for essential goods will continue to weigh on households, worsening poverty and food insecurity despite the stronger economic expansion.
For sub-Saharan Africa, the Fund projected growth to remain broadly stable at 4.3% in 2026, although it said the regional average masks substantial divergence across countries.
According to the IMF, these differences reflect varying levels of policy space, the pace of reform implementation and countries’ exposure to external shocks.
The report noted that oil-importing, non-resource-intensive economies are expected to be more adversely affected by higher energy and food prices.
By contrast, some larger economies are continuing to benefit from earlier stabilisation and reform efforts, even though they remain largely absent from the AI-driven global technology upswing and continue to face headwinds from declining official development assistance.
The IMF said risks to the global outlook are more balanced than in April but remain tilted to the downside.
The most immediate threat to the baseline forecast stems from developments in the Middle East, warning that any re-escalation of geopolitical tensions would weaken growth and intensify inflationary pressures.
However, the Fund said growth could exceed its baseline forecast if the reopening of the Strait of Hormuz proceeds more smoothly than assumed and commodity prices are lower than expected.
It also said economic activity could surprise on the upside if AI-related capital spending remains exceptionally strong or if financial conditions ease further, offsetting the effects of geopolitical tensions, trade fragmentation and weak policy buffers.
Globally, the IMF projects economic growth to slow to 3.0% in 2026 before recovering to 3.4% in 2027.
It said the broadly unchanged outlook compared with its April 2026 forecast conceals significant cross-country variation, with upgrades for some energy exporters and economies closely integrated into global technology value chains, and downgrades for commodity importers that are not well positioned to benefit from AI-driven activity.
The Fund also forecasts global trade volume growth to slow from 5.0% in 2025 to 3.5% in 2026, before recovering to 4.3% in 2027, reflecting the fading effects of earlier front-loading, the drag from tariffs and the gradual adjustment of global trade linkages and production chains through trade diversion, rerouting and continued growth in technology-related trade flows.
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