IMF Advises Nigeria to Provide Cash Transfers to Vulnerable Households

By Adedapo Adesanya

The International Monetary Fund (IMF) has urged the Nigerian government to provide cash transfers and temporary, targeted income support to vulnerable households to reduce poverty and improve food security amid high inflation.

The Fund made the recommendation in its October 2026 World Economic Outlook (WEO), released at the ongoing Annual Meetings of the IMF and World Bank Group in Bangkok, Thailand.

The IMF said the support would help cushion the impact of rising living costs on vulnerable households, particularly as prices of essential items remain high despite Nigeria’s economic growth.

It also urged the Central Bank of Nigeria (CBN) to ensure inflation returns to its policy target within the monetary policy horizon, which it typically considers to be two to three years.

“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 must ensure that inflation returns to target within the policy horizon, which we typically consider to be two to three years,” the Fund said.

The IMF added that monetary policy measures should be supported by a credible medium-term fiscal framework focused on improving public expenditure and strengthening revenue collection.

Speaking at the report’s launch, the Fund’s Economic Counselor, Ms Silvana Tenreyro, projected Nigeria’s economy to grow by 4.3 per cent in 2027, faster than those of advanced economies, including the United Kingdom, Canada and Germany.

The fund acknowledged that Nigeria’s status as an energy exporter had helped sustain economic growth, but warned that households continued to face high living costs.

“These are essential items, and their prices have risen significantly. The question is how to address these pressures while ensuring that the burden does not fall disproportionately on vulnerable households,” it said.

Globally, the IMF projected economic growth of 3.0 per cent in 2026, warning that an energy supply shock linked to the conflict in the Strait of Hormuz had pushed oil prices up by 32 per cent this year and raised global inflation to 4.7 per cent.

The Fund said the shock had reversed two years of progress in reducing inflation, while urging African governments to strengthen support for vulnerable households.

It projected global growth to rebound to 3.4 per cent in 2027, assuming the Strait of Hormuz fully reopens by March next year.

The report also identified investment in artificial intelligence, including data centre construction, as a factor supporting global economic activity. However, it warned of financial risks arising from a possible correction in AI investments, trade fragmentation and the expansion of hedge funds.