Washington, D.C., The International Monetary Fund (IMF) has cautioned that Nigeria’s cost-of-living pressures are intensifying, citing a 15% year-on-year rise in transport costs driving food inflation, while limited fiscal capacity restricts government intervention.
The Director of the African Department at the IMF, Abebe Selassie, gave the warning during the African Department media briefing on Sub-Saharan Africa’s regional economic outlook at the IMF/World Bank Spring Meetings 2026 in Washington on Thursday.
He said the global and regional shocks were compounding vulnerabilities across African economies, with Nigeria particularly affected by escalating logistics and transportation costs that are impacting supply chains.
Selassie noted that persistent inflationary trends in Nigeria were largely driven by food prices, which accounted for a major component of the consumer basket and responded quickly to increases in transport costs.
He said that the recent fuel price hikes were linked to rising global oil prices, which had pushed pump prices sharply higher, transmitting cost pressures across distribution networks and worsening price instability in essential commodities.
According to him, transport costs have increased by X% in both urban and rural areas. This places extra strain on households and amplifies hardship through higher food and living expenses nationwide.
Selassie said that, beyond inflation, the shocks were disrupting food systems, as rising logistics costs, expensive inputs such as fertiliser, and supply bottlenecks combined to raise production and distribution costs.
He said that, despite these challenges, ongoing fiscal and debt reforms were beginning to strengthen Nigeria’s resilience and provide limited room to absorb external shocks.
Selassie said recent efforts to stabilise public finances are creating financial buffers. These buffers help cushion the social and economic impact of emerging global disruptions on vulnerable populations.
He, however, warned that policy responses must remain measured, ensuring that short-term relief measures do not derail medium-term fiscal sustainability and broader economic reform objectives.
Selassie said that, in debt strategy, the key priority was to maintain sustainable debt levels relative to repayment capacity, rather than choosing between domestic and external borrowing options.
He added that effective debt management is critical in safeguarding macroeconomic stability and investor confidence. This includes balanced maturities and prudent borrowing decisions.
The assistant director at the IMF’s African Department, Amadou Sy, said progress under the African Continental Free Trade Area (AFCFTA) has been uneven. This is despite its strong long-term potential.
Sy also identified unresolved issues, such as rules of origin and tariff negotiations, as constraints, limiting trade’s ability to support diversification and serve as a buffer against economic shocks.
He said advancing trade reforms, improving customs systems, and expanding access to trade finance will be vital. These moves are key to unlocking the full benefits of continental economic integration.
