The International Monetary Fund has revised Nigeria’s economic growth forecast for 2026 downward to 4.1 percent, citing rising global uncertainties and domestic cost pressures impacting key sectors.

The latest projection represents a 0.3 percentage point drop from the 4.4 percent estimate released earlier in January 2026, reflecting a more cautious outlook for Africa’s largest economy.

Speaking during a briefing for the IMF’s April 2026 Global Financial Stability Report, Deniz Igan explained that the downgrade mirrors broader economic headwinds affecting Sub-Saharan Africa.

She noted that while the region recorded relatively strong growth in 2025, new global shocks—particularly ongoing geopolitical tensions—have weakened momentum.

According to the IMF, rising fuel, fertiliser, and shipping costs are expected to weigh heavily on Nigeria’s non-oil sectors, even as higher crude oil prices provide limited support to overall growth.

“Turning to Nigeria, we have revised growth down by 0.3 percentage points to 4.1 percent in 2026,” Igan said, highlighting the dual pressures shaping the country’s outlook.

The Fund also pointed to declining foreign aid across the region, with bilateral support falling between 16 and 28 percent in 2025—a trend expected to persist and further strain developing economies.

Nigeria’s macroeconomic environment remains challenging, with inflation recorded at about 15.06 percent year-on-year as of February 2026. Meanwhile, interest rates remain elevated, reflecting ongoing efforts by the Central Bank of Nigeria to stabilise prices and manage inflation expectations.

The IMF advised policymakers to maintain tight monetary conditions while closely monitoring exchange rates and inflation trends to sustain economic stability.

Globally, growth is also slowing. The IMF projects world output to decline from 3.4 percent in 2025 to 3.1 percent in 2026, before a modest recovery to 3.2 percent in 2027.

Advanced economies are expected to see slower expansion, with countries like the United States projected to grow at 2.3 percent in 2026, while the United Kingdom is forecast to expand by just 0.8 percent.

In Europe, Germany is expected to recover gradually, while India stands out among major economies with a strong growth projection of 6.5 percent.

Across Sub-Saharan Africa, growth is projected to ease slightly from 4.5 percent in 2025 to 4.3 percent in 2026, reflecting both external shocks and persistent structural challenges.

The IMF linked much of the current uncertainty to rising tensions in the Middle East, particularly around the Strait of Hormuz, a critical global oil transit route. Disruptions in the region have increased energy prices, shipping costs, and insurance premiums, placing additional strain on import-dependent economies like Nigeria.

These pressures have worsened trade conditions, contributed to inflation, and slowed economic expansion—factors now reflected in the IMF’s revised outlook.

Despite the downgrade, the Fund projects a modest recovery for Nigeria in 2027, suggesting that current challenges may ease if global conditions stabilise and domestic reforms gain traction.

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Nigeria has been ranked as the third-largest recipient of United States foreign aid in Sub-Saharan Africa, according to a new analysis by Cable Index.

The report, which tracked aid disbursements across 20 African nations as of September 2025, shows that Nigeria received a total of $516.69 million in U.S. assistance. The country trails Ethiopia and the Democratic Republic of Congo (DRC), which received $617.35 million and $571.35 million, respectively.

According to the analysis, U.S. foreign assistance remains largely directed toward humanitarian relief, health care programs, education, and governance initiatives aimed at strengthening democratic institutions and promoting stability across Africa.

Other notable beneficiaries include Sudan ($514.55 million), Kenya ($402.84 million), Somalia ($402.57 million), and Mozambique ($325.41 million). At the lower end of the chart, Ghana ranked 20th with $114.56 million in disbursements.

The findings underscore Washington’s ongoing engagement with African nations through development aid and humanitarian partnerships.

Below is the full list of U.S. foreign aid recipients as of September 2025:

1. Ethiopia – $617.35m

2. Democratic Republic of Congo – $571.35m

3. Nigeria – $516.69m

4. Sudan – $514.55m

5. Kenya – $402.84m

6. Somalia – $402.57m

7. Mozambique – $325.41m

8. Uganda – $324.17m

9. South Sudan – $308.43m

10. Tanzania – $288.80m

11. Zambia – $214.42m

12. Senegal – $205.74m

13. Burkina Faso – $202.22m

14. Mali – $183.07m

15. Malawi – $181.98m

16. Zimbabwe – $173.48m

17. South Africa – $166.08m

18. Niger – $162.08m

19. Côte d’Ivoire – $129.59m

20. Ghana – $114.56m

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Nigeria has been left out of the International Monetary Fund’s (IMF) list of Africa’s fastest-growing economies, with Benin Republic, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda emerging as the continent’s top performers.

The IMF said these five countries are now among the world’s fastest-expanding economies, driven by sustained reforms, better fiscal management, and increased investment in infrastructure and manufacturing.

Abebe Selassie, Director of the IMF’s African Department, revealed this during the launch of the latest Regional Economic Outlook for Sub-Saharan Africa on Thursday. He noted that the region’s growth is expected to stabilise at 4.1% in 2025, supported by ongoing reforms and macroeconomic stabilisation efforts.

“Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda are among the fastest-growing economies globally,” Selassie said. “Despite global headwinds—softer commodity prices, weaker demand, and tighter financial conditions these countries have sustained strong growth through prudent reforms.”

Although Nigeria’s growth outlook has been revised upward to 3.9% in 2025, the IMF said this remains below its potential. The Fund attributed Nigeria’s modest improvement to higher oil output, fiscal policy adjustments, and improved investor confidence.

Data from Nigeria’s National Bureau of Statistics showed GDP growth of 4.23% year-on-year in Q2 2025, up from 3.48% in the same period of 2024 reflecting gains from increased oil production and recovery in non-oil sectors.

However, Selassie warned that structural weaknesses, high inflation, unreliable power supply, and overreliance on oil revenue continue to constrain Nigeria’s long-term growth prospects. He urged the government to deepen fiscal reforms, expand non-oil revenue, and strengthen electricity and infrastructure systems.

The IMF also raised concern over rising financial vulnerabilities in several African countries, including Nigeria, as governments increasingly depend on domestic banks for borrowing. About half of public debt in the region is now held by local financial institutions, heightening risks to banking stability.

“While domestic borrowing has helped sustain spending, it also exposes banks to sovereign risk, especially where debt levels and interest rates are high,” Selassie cautioned.

To bolster resilience, the IMF recommended two key policy actions domestic revenue mobilisation through tax reforms and digitalisation, and stronger debt transparency and management to reduce borrowing costs.

Speaking specifically on Nigeria, the IMF noted that inflation has begun to ease following tighter monetary policy and exchange rate reforms, though prices remain elevated. The Fund described Nigeria’s current fiscal stance as “neutral,” supporting efforts to control inflation without stifling growth.

IMF officials praised the government’s reforms in tax administration and public expenditure, citing improved efficiency, reduced waste, and greater transparency.

Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, said Nigeria’s recent exchange rate adjustments and tighter monetary policy have enhanced policy credibility and strengthened foreign reserves. “A flexible exchange rate helps cushion shocks and restore equilibrium,” he noted.

Assistant Director Jason Wu added that Nigeria’s revenue collection and FX reserve management have improved, helping lower inflation from above 30% last year to about 23% this year.

Despite these gains, the IMF warned that Sub-Saharan Africa remains exposed to global uncertainties, including fluctuating commodity prices and volatile capital flows.

Selassie concluded that countries must sustain fiscal discipline, strengthen institutions, and deepen regional trade to unlock Africa’s full growth potential.

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The announcement, made during President Joe Biden’s visit to Angola, allocates nearly $823 million through USAID, with over $202 million sourced from the U.S. Department of Agriculture’s Commodity Credit Corporation. An additional $186 million will come via the U.S. Department of State.

At the U.S.-Africa Leaders’ Summit in 2022, President Biden reaffirmed America’s commitment to tackling Africa’s food crisis. The continent remains the region with the highest proportion of its population facing hunger. According to the UN, nearly 300 million Africans, or one in five, experienced hunger in 2023, with the situation worsening due to armed conflict, extreme weather, natural disasters, and other emergencies.

This new funding will enhance life-saving support for affected communities, addressing malnutrition, disease outbreaks, and other urgent needs. Humanitarian partners will provide emergency health care, clean water, sanitation services, and protection programs for vulnerable groups, including refugees and internally displaced persons.

A significant portion of the funds, sourced from the Commodity Credit Corporation, will be used to purchase and distribute agricultural commodities from American farmers to deliver food assistance in East and Central Africa. Additionally, the aid will address essential needs such as education, mental health support, and shelter.

The U.S. has long been a major supporter of humanitarian efforts in Africa, with nearly $6.6 billion allocated for sub-Saharan Africa in Fiscal Year 2024 alone. While the commitment remains steadfast, U.S. officials continue to urge the global donor community to contribute more to meet the escalating needs.

This latest announcement underscores the U.S.’s dedication to supporting African nations and communities in overcoming the severe challenges posed by food insecurity and humanitarian crises.

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