*Says Transport Cost Deepen Cost-of-living Crisis
THE International Monetary Fund (IMF) has warned that Nigerians may face even tougher living conditions as inflationary pressures and surging transport expenses drive food inflation, while limited fiscal capacity restricts government intervention and persistent global shocks continue to strain household incomes across the country.
The Fund’s warning in a review of Nigeria’s near-term economic outlook, came at a time when the country is experiencing a surge in crude oil prices, offering potential revenue relief for the government, lamenting that the benefits of higher oil earnings may be offset by rising debt levels, structural weaknesses in public finances and ongoing global uncertainties.
Speaking during the Economic Outlook for Sub-Saharan Africa at the ongoing World Bank-IMF Spring Meetings 2026 in Washington D.C., United States (US), Director of the IMF’s African Department, Abebe Selassie, said the impact of global geopolitical tensions was already being felt across African economies, including Nigeria, noting that rising transport and food costs were driving significant economic pressure on households.
Selassie stated: “The immediate effect will be quite a bit of pressure, including on food security… transportation costs have gone up, it’s going to raise the cost of food and so quite a bit of dislocation.”
Higher transportation expenses, he stated, are already feeding into inflation, especially in urban centres, where costs are rising sharply, while rural communities are also feeling the impact due to supply chain constraints.
“We’re already seeing quite a lot of increase in transportation prices… Transportation costs are very high for people in urban areas, rural areas even more so,” he said, stressing that the situation was already placing visible strain on livelihoods.
He noted that recent fuel price hikes was linked to rising global oil prices and had pushed pump prices sharply higher, transmitting cost pressures across distribution networks and worsening price instability in essential commodities.
Selassie said beyond inflation, the shocks were disrupting food systems, as rising logistics costs, expensive inputs, such as fertiliser, and supply bottlenecks combined to elevate production and distribution expenses.
He acknowledged that ongoing fiscal and debt reforms were beginning to strengthen Nigeria’s resilience and provide limited room to absorb external shocks, in spite of the challenges, adding that recent efforts to stabilise public finances were creating buffers that helped cushion the social and economic impact of emerging global disruptions on vulnerable populations.
He 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, saying the key priority was to maintain sustainable debt levels relative to repayment capacity, rather than choosing between domestic or external borrowing options.
He stated that effective debt management, including balanced maturities and prudent borrowing decisions, remained critical in safeguarding macroeconomic stability and investor confidence.
Assistant Director in the Department, Amadou Sy, said progress under the African Continental Free Trade Area (AfCFTA) had been uneven, despite its strong long-term potential.
Sy 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 would be vital in unlocking the full benefits of continental economic integration.
