The International Monetary Fund (IMF) has delivered a vote of confidence in Nigeria's economic trajectory, raising its growth forecast for the country for the year 2026. In its latest assessment, the Fund projects the Nigerian economy will expand by 4.4 per cent in 2026, marking an improvement from earlier estimates.
Steady Expansion and Revised Projections
This optimistic revision was published in the IMF's January 2026 World Economic Outlook Update, a document named "Global Economy: Steady amid Divergent Forces." The report outlines a path of steady economic growth for Nigeria, anticipating an increase from 4.1 per cent in 2024 to 4.2 per cent in 2025, before reaching the upgraded 4.4 per cent rate in 2026. This new figure represents an upward adjustment of 0.2 percentage points compared to the Fund's forecast from October 2025.
The IMF attributed this stronger outlook to improved macroeconomic conditions within Nigeria and the sustained momentum of government reforms. Nigeria's positive revision aligns with a broader trend of recovery across sub-Saharan Africa, where regional growth is projected to hit 4.6 per cent in both 2026 and 2027. The Fund credits ongoing stabilisation and reform efforts in key regional economies for this continental uplift.
Global Context and Key Factors for Nigeria
Globally, the IMF expects the world economy to grow by 3.3 per cent in 2026, demonstrating resilience despite persistent uncertainties. The global outlook is shaped by a balance of forces, where the effects of shifting trade policies are counteracted by rising investment in technology and artificial intelligence.
For Nigeria, a crucial factor influencing the 2026 forecast is the price of energy commodities. The IMF projects these prices could decline by approximately seven per cent in 2026, primarily due to weak global demand. However, the report notes that oil prices are likely to find some support from OPEC+ production management and strategic stockpiling by China, which should help cushion against severe drops.
Persistent Risks and Policy Recommendations
Despite the improved forecast, the IMF cautioned that risks to Nigeria's economic outlook remain, with a bias toward the downside. The Fund highlighted several potential threats:
- Escalating geopolitical tensions in the Middle East and Ukraine, which could disrupt global supply chains.
- Renewed trade tensions and a rise in protectionist policies, increasing worldwide uncertainty.
- High levels of public debt and fiscal deficits, potentially pushing long-term interest rates higher.
To safeguard and sustain growth, the IMF urged Nigerian authorities to rebuild fiscal buffers and continue advancing structural reforms. It emphasized the critical importance of central bank independence for maintaining macroeconomic stability, especially in a volatile global climate. The Fund also advised that any additional fiscal support measures should be precisely targeted and temporary in nature.
The IMF concluded that Nigeria's ability to achieve this 2026 growth target will hinge on the consistent implementation of its reform agenda and its capacity to navigate both domestic challenges and external shocks as the global economy continues to adjust.
