The International Monetary Fund (IMF) has cautioned that Nigerians may face more difficult economic conditions in the near future, as rising food and transportation costs continue to erode household incomes amid persistent global disruptions.
Despite this, higher crude oil prices—driven by geopolitical tensions, particularly uncertainty surrounding talks between the United States and Iran—have pushed Nigeria’s oil grades above $113 per barrel. This development offers potential for increased government revenue, with prices significantly exceeding the $60 benchmark set in the 2026 national budget.
According to Abebe Selassie, Director of the IMF’s African Department, the ongoing global crisis is already intensifying living costs across the region. He explained that higher transportation expenses are directly contributing to increased food prices, worsened by challenges such as limited fertilizer availability and rising input costs.
Selassie noted that while governments have implemented reforms to stabilise debt and reduce fiscal deficits, citizens are already experiencing financial strain. He stressed that maintaining these reforms is critical, warning that abandoning them could worsen economic conditions.
On Nigeria’s debt outlook, the IMF projected that the country’s debt-to-GDP ratio could rise to 33.1 percent by 2027, up from an estimated 32.3 percent in 2026. Data from the Debt Management Office shows that total public debt reached N159.27 trillion by the end of 2025, reflecting a steady increase.
The IMF advised governments to prioritise essential spending, improve efficiency, and strengthen domestic revenue through better tax policies and administration. It also highlighted the importance of communication and stakeholder engagement when implementing difficult economic decisions.
Looking ahead, the Fund emphasised that structural reforms—particularly in technology adoption and regional trade—could improve economic resilience. It pointed to ongoing efforts under the African Continental Free Trade Area as a step in the right direction, though key negotiations remain unresolved.
Overall, the IMF warned that rising global tensions and economic uncertainties could further pressure public finances, making it crucial for Nigeria and other countries to stay on a disciplined fiscal path.
