The International Monetary Fund has said that higher energy costs, driven by the conflict in the Middle East, will have a significant impact on the Nigerian economy this year. This was disclosed at the press briefing on the World Economic Outlook, held during the World Bank/IMF Spring Meetings 2026 in……
The International Monetary Fund has said that higher energy costs, driven by the conflict in the Middle East, will have a significant impact on the Nigerian economy this year.
This was disclosed at the press briefing on the World Economic Outlook, held during the World Bank/IMF Spring Meetings 2026 in Washington DC on Tuesday.
TVC News Online reports that the IMF had cut the growth for Sub-Saharan Africa by 0.4 percentage points cumulatively for 2026 and 2027. Also, the median inflation in Sub-Saharan Africa is projected to go up from 3.4% in 2025 to 5% in 2026.
Answering questions from journalists after unveiling the latest report titled, ‘Global Economy in the Shadow of War,’ the Division Chief, Research Department, IMF, Deniz Igan, said, “For sub‑Saharan Africa, we need to take a step back. Actually, 2025 was a relatively strong year, and before the war began, global growth prospects were resilient, non‑oil commodity prices were strong and external financial conditions were supportive, which actually helped a lot of countries in the region.
“Now, with the war, we have reduced global growth and softened prices for non‑oil commodities and also worsened terms of trade for oil importers, and that is an important aspect for variation within the region, as well. And on top of that, the region is also facing significant challenges from headwinds from declining foreign aid, which, on the bilateral aid cuts, range from 16 to 28 per cent in 2025, and we project that trend to continue.
“Now, how is that affecting the economy? As Pierre‑Olivier said, we have a downgrade on growth by 0.4 percentage points cumulatively for ’26 and ’27; and at the same time, median inflation in sub‑Saharan Africa is projected to go up, from 3.4 per cent in 2025 to 5 per cent in 2026. And that’s solely reflecting high oil and fertiliser prices, fuel shortages, potentially, and rising borrowing costs. And fertiliser prices, in particular, are a concern for the region because of its dependence on agricultural products, as well, and the existing level of food insecurity.”
On Nigeria specifically, Igan added, “Now, turning to Nigeria quickly. We have revised down Nigerian growth, as well, by 0.3 percentage points to 4.1 in 2026. And that is reflecting a balance of two forces. One is that the war‑related higher fuel and fertiliser prices and higher shipping costs that I mentioned are going to weigh on non‑oil activity in Nigeria. There’s some offset coming from higher oil prices, but at the end of the day, the balance is weighing on growth in ’26, with some recovery built in in 2027.
“As far as inflation developments go, we believe that tight monetary policy and remaining data‑dependent and watching very carefully both exchange rate movements and inflation expectations is going to be crucial to achieve the inflation target of the central bank at this time.”
In his comments, the Director, Research Department, IMF, Pierre‑Olivier Gourinchas, said, “So on sub‑Saharan Africa, I mean, we are seeing just very broadly. We are seeing some downgrade of growth, and we are seeing some uptick in inflation in a number of countries in the region. So the impact is very much along the lines of what we see more broadly, which is for a lot of the countries, especially the ones that are energy importers, but there are also energy exporters in the region, so there is a differentiation in terms of the impact.
“On the Fund’s engagement more broadly, I mean, we are certainly following with a number of countries what their needs might be in the current environment. We’re certainly coordinating, as well—our Managing Director has started a coordination group with the IEA and the World Bank Group. So we are following developments in energy markets very, very closely. And of course, we are calling for a very swift end to the hostilities and a normalisation in energy markets.”
