Oil price gains are not enough to save Nigeria’s economy from global shock: IMF

The International Monetary Fund on Tuesday said rising oil prices will provide some relief to Nigeria. However, the IMF noted that these gains are inadequate to shield the country from global economic shocks.

The IMF’s economic counsellor and director of research, Pierre-Olivier Gourinchas, said this at the ongoing IMF/World Bank Spring Meetings in Washington, D.C. on Tuesday.

Mr Gourinchas said that the effects of the current global environment, driven by geopolitical tensions and rising energy costs, were largely negative for many economies, particularly energy importers.

“For many countries, especially energy importers, the effects are negative, although there is some differentiation, as a number of countries in the Gulf region are also energy exporters,” he said.

Mr Gourinchas said the fund was closely monitoring developments in energy markets and engaging with countries to assess emerging financing and policy needs.

He said that it was also coordinating with global institutions to respond to the evolving crisis.

The deputy director of the IMF’s research department, Petya Koeva-Brooks, said that Nigeria’s growth outlook had been revised downward by 0.3 percentage points to 4.1 per cent in 2026, reflecting a balance of opposing forces.

According to her, higher global oil prices are expected to support government revenues and provide some external buffer.

She said that the overall impact of the shock remained negative.

“The war-related increase in fuel and fertiliser prices, as well as higher shipping costs, are expected to weigh on non-oil activity in Nigeria,” said Ms Koeva-Brooks. “There is some offset from higher oil prices, but on balance, the effect is a drag on growth in 2026, with a recovery expected in 2027.”

Ms Koeva-Brooks said that the broader Sub-Saharan Africa region was also facing mounting headwinds. She said that the headwinds included weaker global growth, softer non-oil commodity prices, and worsening terms of trade for oil-importing economies.

She said the region was constrained by declining foreign aid flows, with bilateral support projected to fall by 16 to 28 per cent.

Ms Koeva-Brooks said that growth across the region had been downgraded, while inflationary pressures were set to intensify, driven by higher energy and fertiliser prices, potential fuel shortages, and rising borrowing costs.

She said that for Nigeria, these pressures were particularly significant given the importance of agriculture and the sensitivity of food prices to input costs such as fertiliser.

She called for continued vigilance by the Central Bank of Nigeria, adding that a tight, data-dependent policy stance will be critical for navigating the current environment.

“Close monitoring of exchange rate movements and inflation expectations will be essential to achieving price stability,” she said.