The International Monetary Fund (IMF) has warned that rising food and essential goods prices could deepen poverty and food insecurity in Nigeria, despite an improved economic outlook and a projected 4.2 per cent growth rate in 2026, according to its October 2026 World Economic Outlook released on Tuesday, 13 October.

The report, titled Resilience Under Strain, Urgent Choices, highlights the gap between improvements in Nigeria’s macroeconomic indicators and the financial pressures confronting households struggling to afford food, energy and other necessities.

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“Nigeria is supported by improved macroeconomic stability and favourable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity,” the Fund stated.

The assessment presents a mixed picture for Africa’s largest economy.

Although economic reforms and favourable external trade conditions have supported growth, the benefits have yet to remove the pressure on household budgets, particularly among low-income families.

The IMF’s latest projection raises Nigeria’s economic growth forecast for 2026 to 4.2 per cent, an upward revision of 0.1 percentage point from its April estimate.

The economy is expected to expand by a further 4.3 per cent in 2027, compared with estimated growth of 4.0 per cent in 2025. Premium Times reported the revised figures following the release.

The projected expansion reflects improved macroeconomic stability and favourable terms of trade, which can support government revenue and economic activity when international commodity prices move in Nigeria’s favour.

However, stronger economic growth does not necessarily mean that households can afford more goods and services.

When the prices of food, transport, electricity and other essentials rise faster than household incomes, families may continue to experience financial hardship even as the wider economy expands.

Inflation is expected to ease, according to the IMF’s projections.

Average consumer price inflation in Nigeria is forecast to fall from 23.0 per cent in 2025 to 15.6 per cent in 2026, before declining further to 14.7 per cent in 2027.

The projected slowdown in inflation could offer some relief, but it does not mean that prices will return to previous levels.

A lower inflation rate generally indicates that prices are rising more slowly, rather than that goods and services are becoming cheaper.

For households already spending a substantial share of their income on food, the distinction is significant.

Even when inflation moderates, families may continue to face high costs for basic necessities, particularly if wages and other sources of income fail to keep pace.

The IMF also projected that Nigeria’s current account surplus would rise to 7.0 per cent of gross domestic product in 2026, up from 4.8 per cent in 2025, before moderating to 4.4 per cent in 2027.

The projected improvement suggests a stronger external position in 2026, although it does not directly measure the financial well-being of individual households.

Across sub-Saharan Africa, the Fund expects economic growth to remain at 4.5 per cent in 2026, while warning that the regional average conceals substantial differences between countries.

“Growth in sub-Saharan Africa is expected to remain stable at 4.5 per cent in 2026, though this masks some substantial divergence across countries,” the report stated.

The IMF attributed the differences to variations in economic reforms, fiscal capacity, exposure to commodity price movements, climate shocks and access to external financing.

Some larger economies have benefited from earlier stabilization measures, while oil-importing and less resource-intensive countries face greater exposure to higher energy and food costs.

Several African economies are also contending with declining official development assistance and limited participation in the investment boom associated with artificial intelligence.

The Fund warned that the global outlook remains vulnerable to geopolitical tensions, persistent increases in food and energy prices, and tighter financing conditions.

A prolonged conflict in the Middle East or further disruptions to energy infrastructure could increase production and transport costs, adding to inflationary pressures in countries already facing economic difficulties.

“Risks are skewed to the downside,” the IMF said, warning that further disruptions could undermine global economic stability and weaken growth prospects.

The report’s concerns come amid renewed attention to Nigeria’s poverty figures.

A separate assessment published on 12 October by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative found that the number of Nigerians living in multidimensional poverty had increased by 17.9 million between 2021 and 2024.

The 2026 Global Multidimensional Poverty Index placed Nigeria’s multidimensional poverty rate at 38.7 per cent in 2024, compared with 33 per cent in 2021.

The number of people affected rose to approximately 90.1 million.

The index measures overlapping disadvantages involving health, education and living standards, rather than income alone.

UNDP’s 2026 Global Multidimensional Poverty Index provides the broader context for the findings.

The figures highlight the difficulty of translating economic stabilization into lasting improvements in living standards.

They also underline the importance of policies that address the immediate cost of living while improving access to employment, education, healthcare and other essential services.

To protect vulnerable households, the IMF recommended temporary and targeted financial assistance rather than broad interventions that could place additional pressure on public finances.

The Fund said governments should “rely primarily on temporary, targeted income support for the most vulnerable”, while strengthening social protection systems to help households withstand future economic shocks.

Such measures could include targeted cash transfers to low-income families, provided that assistance reaches those most in need and remains financially sustainable.

Effective implementation would be essential, particularly in identifying eligible households and ensuring that support arrives when it is needed.

For Nigeria, the policy challenge is therefore twofold: sustaining economic reforms that support growth and stability while preventing vulnerable citizens from bearing a disproportionate share of the adjustment costs.

The IMF’s assessment does not suggest that economic stabilization has failed.

Rather, it underscores that improvements in national economic indicators and improvements in household welfare are not always achieved at the same pace.

As Nigeria moves towards the end of 2026, the projected expansion of the economy offers grounds for cautious optimism.

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Yet the lasting measure of progress will depend not only on growth and inflation figures, but also on whether households can afford nutritious food, meet essential expenses and experience a meaningful improvement in their standard of living.