IMF Raises Alarm Over Nigeria’s Cost-of-Living Crisis, Calls For Cash Transfers To Vulnerable
According to thebureaujournal.com, the International Monetary Fund (IMF) has urged Nigeria to provide targeted cash transfers and temporary income support for vulnerable households, warning that stronger economic growth has not removed the pressure of rising living costs.
In its October 2026 World Economic Outlook, the Fund projected Nigeria’s economy would expand by 4.3 per cent in 2027 but stressed the need to protect families struggling with expensive food, fuel and other essential goods.
The recommendation was presented during the IMF–World Bank Annual Meetings in Bangkok, Thailand.
Cash Transfers to Support Food Security
The IMF said targeted assistance could help reduce poverty and improve food security while preventing vulnerable households from bearing a disproportionate share of economic shocks.
The concern reflects the pressures examined in The Bureau Journal’s reporting on food prices and available inflation data in Nigeria and changes in food costs in Kogi State.
Nigeria’s Growth Forecast Rises to 4.3%
Speaking at the report’s launch, IMF Economic Counsellor Silvana Tenreyro projected Nigerian growth of 4.3 per cent next year.
The Fund’s assessment put growth at 4.0 per cent in 2025 and projected 4.1 per cent for 2026.
| Year | Nigeria GDP growth | Status |
|---|---|---|
| 2025 | 4.0% | IMF estimate |
| 2026 | 4.1% | IMF projection |
| 2027 | 4.3% | IMF projection |
The projected increase from 2026 to 2027 is 0.2 percentage points. GDP growth measures economic output and does not, by itself, establish an improvement in household living standards.
The IMF attributed Nigeria’s outlook partly to macroeconomic stabilisation and favourable terms of trade, while noting that its position as an energy exporter had supported activity.
However, it warned that higher prices could weaken the benefits reaching households.
CBN Urged to Balance Inflation and Growth
The Fund called on the Central Bank of Nigeria to keep inflation moving towards its policy target while accounting for the effects of economic shocks on activity and household welfare.
“Inflation is high, but economic activity is being constrained or reduced by the shock. This is where the central bank needs to manage the trade-off,” it said.
It said monetary policy should return inflation to target within a policy horizon typically covering two to three years.
The IMF also recommended a credible medium-term fiscal framework centred on better-quality public spending and stronger revenue collection.
Cash Transfer Coverage Below Target
In its June 2026 Article IV Consultation assessment, the Fund said Nigeria’s reforms had improved macroeconomic outcomes and strengthened resilience, but warned that higher food, fuel and fertiliser prices threatened household welfare.
It estimated poverty at 63 per cent of the population and said 27 million Nigerians experienced food insecurity in the autumn of 2025.
The assessment reported that 9.2 million households had been enrolled in the World Bank-supported cash transfer system, against a target of 15 million.
| Social protection indicator | Figure reported by IMF |
|---|---|
| Households enrolled | 9.2 million |
| Enrolment target | 15 million households |
| Gap against target | 5.8 million households |
| Transfers received since 2023 | No more than three payments of ₦25,000 per enrolled household |
The enrolment figures represent approximately 61.3 per cent of the target. Enrolment should be distinguished from the frequency and completeness of payments.
Pressure on earnings has also featured in workers’ appeals over outstanding allowances and housing costs, alongside wider concerns about managing household budgets.
Energy Disruption Raises Global Inflation Risks
The World Economic Outlook projected global growth of 3 per cent in 2026 and global inflation of 4.7 per cent.
The Fund linked renewed price pressures to an energy supply disruption associated with the conflict around the Strait of Hormuz, saying oil prices had increased by 32 per cent during the year.
It projected global growth of 3.4 per cent in 2027, conditional on the Strait being fully reopened by March.
Investment in artificial intelligence, data centres and related infrastructure was providing support to economic activity, although the IMF warned of risks from a correction in AI-related investment and further fragmentation of international trade.
Reforms Must Reach Households
The IMF’s recommendations place social protection alongside monetary and fiscal measures as part of the response to Nigeria’s economic challenges.
President Bola Tinubu has defended the administration’s approach in his Independence Day address on economic reforms. Opposition proposals have also focused on energy costs, including Atiku Abubakar’s position on fuel subsidy and domestic refining.
For the Fund, the immediate priority is ensuring that improved economic indicators are accompanied by practical support for people whose incomes cannot keep pace with essential expenses.
COURTESY: thebureaujournal.com
