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IMF reveals that rising prices threaten Nigeria’s poverty reduction gains

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The International Monetary Fund (IMF) has warned that rising prices of essential goods could deepen poverty and worsen food insecurity in Nigeria despite recent improvements in the country’s macroeconomic stability.

The warning was contained in the IMF’s July 2026 World Economic Outlook Update, which projected that Nigeria’s economy would grow by 4.1 per cent in 2026 and 4.3 per cent in 2027, while cautioning that higher prices for basic necessities could offset some of the gains from ongoing economic reforms.

According to the Fund’s report released on Wednesday, Nigeria has continued to benefit from improved macroeconomic stability and stronger terms of trade, but households remain vulnerable to rising living costs.

The report read, “Nigeria is supported by improved macroeconomic stability and favourable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity.”

The IMF noted that growth across sub-Saharan Africa was expected to remain broadly stable at 4.3 per cent in 2026, although performance would vary widely among countries depending on policy choices, reform implementation and exposure to external shocks.

It said oil-importing and non-resource-intensive economies in the region were likely to suffer more from rising energy and food prices, while some larger economies had benefited from earlier stabilisation efforts despite facing weaker official development assistance and missing out on much of the artificial intelligence-driven global technology boom.

The Fund retained its forecast for Nigeria’s economic growth at 4.1 per cent in 2026, unchanged from its April outlook, before projecting a further increase to 4.3 per cent in 2027.

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Globally, the IMF projected economic growth of 3.0 per cent in 2026 and 3.4 per cent in 2027, compared with an average of 3.5 per cent in 2024 and 2025. It attributed the slowdown to the economic fallout from the war in the Middle East, although stronger technology investment driven by advances in artificial intelligence was expected to partly offset the impact.

The Fund also warned that inflationary pressures had intensified following higher energy prices. It said, “Global headline inflation is expected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before declining to 3.9 percent in 2027,” adding that the recent projections suggested “the disinflation trend in place since the beginning of 2024 has stalled.”

According to the IMF, renewed geopolitical tensions remain the biggest downside risk to the global economy. It warned, “The possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions.”

The report projected that higher energy costs would continue to feed into food prices. The report estimated that crude oil prices would rise by 32 per cent in 2026 compared with 2025 levels, while natural gas prices would increase by 22 per cent. Fertiliser prices were forecast to rise by 26 per cent, with food prices expected to increase by eight per cent because of higher energy, transport and fertiliser costs.

The IMF further cautioned that food insecurity could deteriorate if disruptions in energy and fertiliser markets persisted. It said, “Food insecurity could worsen materially if disruptions in fertilizer and energy markets intensify or linger, especially in low-income countries in South Asia and sub-Saharan Africa, whose food supply is provided largely by smallholder farmers unable to outbid competitors from wealthier nations.”

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The Fund advised governments to avoid broad-based fuel subsidies, tax cuts and price controls, arguing that such measures are expensive and often poorly targeted. Instead, it recommended temporary and targeted support for vulnerable households while maintaining policies aimed at restoring price stability.

The report stated, “Fiscal policy should avoid broad-based subsidies, tax cuts, and price controls, which are typically poorly targeted, fiscally costly, and politically difficult to unwind. If support is deemed necessary, it should be temporary, tightly targeted to vulnerable households, and embedded in a macroeconomic policy mix consistent with price stability.”

The IMF also urged countries to rebuild fiscal buffers, strengthen tax administration, improve spending efficiency and expand well-targeted social protection programmes to cushion the impact of rising living costs while preserving debt sustainability.

The PUNCH recently reported that Nigeria’s headline inflation rate rose to 15.93 per cent in May 2026, marking the third consecutive monthly increase in the annual inflation rate, as the organised private sector blamed geopolitical tensions in the Middle East, rising energy costs, insecurity and import bottlenecks for the worsening inflation.

The Consumer Price Index report released by the National Bureau of Statistics showed that inflation increased from 15.69 per cent in April to 15.93 per cent in May, extending a rebound that began in March after inflation fell slightly to 15.06 per cent in February.

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DisCos earn N603bn as power offtake drops

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Electricity distribution companies collected N603.64bn from customers in the second quarter of 2026, despite a decline in the volume of electricity they received from the power market.

The figure was contained in the Nigerian Electricity Regulatory Commission’s second-quarter 2026 report, which showed that the average energy offtake by the DisCos at their trading points fell to 3,197.03 megawatt-hours per hour in the quarter.

The Q2 figure represented a 112.45MWh/h, or 3.40 per cent, decline from the 3,309.48MWh/h average recorded in the first quarter. Despite the decline in offtake, the DisCos recorded an overall offtake performance of 94.07 per cent during the quarter, against available partially contracted capacity of 3,398.41MWh/h.

According to the report, the DisCos received a total of 6,982.32 gigawatt-hours of electricity during the quarter but billed customers for only 5,812.31GWh. It stated, “This translates to an overall energy accounting efficiency of 83.24 per cent and represents a 0.24pp decrease compared to 2026/Q1 (83.48 per cent).”

The report further revealed that the naira value of electricity off-taken by the DisCos stood at N946.57bn, while the total value of energy billed to customers was N744.67bn.

This translated to a billing efficiency of 78.67 per cent, representing a decline of 0.57 percentage points from the 79.24 per cent recorded in the first quarter. At the collection stage, the DisCos recovered N603.64bn from the N744.67bn billed to customers, translating to a collection efficiency of 81.06 per cent.

The report said this represented an improvement of 2.11 percentage points from the 78.95 per cent recorded in Q1. However, the difference between the amount billed and the amount collected stood at N141.03bn during the quarter.

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The report also disclosed that the weighted average Aggregate Technical, Commercial and Collection losses across the 11 DisCos stood at 36.23 per cent in Q2.

It stated, “The ATC&C loss of 36.23 per cent is 19.31pp higher than the 2026 MYTO target (16.92 per cent) and translates to a cumulative revenue loss of N129.07 billion across all DisCos.”

The 36.23 per cent loss, however, represented a 1.21 percentage-point improvement from the 37.44 per cent recorded in Q1.

The report noted that all the DisCos failed to meet their ATC&C targets during the quarter, with “Kaduna DisCo recording the worst underperformance relative to the target (Actual – 67.70 per cent vs target – 18.18 per cent),” it stated.

On market obligations, the report said the cumulative upstream invoice payable by the DisCos stood at N410.38bn in Q2.

The amount comprised N326.46bn for generation costs from the Nigerian Bulk Electricity Trading Company and N83.92bn for transmission and administrative services provided by the market operator.

The DisCos collectively remitted N385.44bn, comprising N306.62bn to NBET and N78.82bn to the market operator, leaving an outstanding balance of N24.94bn. This represented a market remittance performance of 93.92 per cent, slightly lower than the 94.08 per cent recorded in Q1.

The report added that the Federal Government had taken responsibility for about 50 per cent, or N321.26bn, of the total generation costs through subsidies arising from the freezing of end-use customer tariffs at the rates applicable in July 2024.

Meanwhile, three international bilateral customers purchasing electricity from grid-connected generating companies paid $8.67m against an $18.84m invoice issued by the market operator during the quarter.

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This represented a remittance rate of 46.02 per cent. Domestic bilateral customers, on the other hand, paid N6.91bn against an invoice of N7.55bn, representing a remittance rate of 91.54 per cent.

Source: punchng.com

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Personal loans rise to N2tn as Nigerians borrow more

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Personal loans obtained by Nigerians rose to an estimated N2.06tn in May 2026, as consumer credit continued to expand amid persistent cost pressures and weak consumer spending, according to the latest Economic Report of the Central Bank of Nigeria.

The figure, calculated from data contained in the CBN’s May 2026 Economic Report, represents about 64.78 per cent of the N3.18tn total consumer credit outstanding during the month. The report covers developments in the real, fiscal, financial and external sectors of the economy.

The apex bank said consumer credit increased by 1.60 per cent from N3.13tn in April to N3.18tn in May, indicating that Nigerians borrowed an additional N50bn within one month.

It said, “Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”

The CBN added, “Personal loans remained the dominant component of consumer credit, accounting for 64.78 per cent, while retail loans constituted 35.22 per cent.”

Based on the proportions reported by the apex bank, personal loans stood at approximately N2.06tn at the end of May, while retail loans amounted to about N1.12tn.

The 1.98 per cent month-on-month increase in personal loans suggests that the balance rose by roughly N40bn during the period. Retail loans, which include credit tied more directly to the purchase of goods and services, recorded a slower increase of 0.90 per cent.

The figures show that personal borrowing remained the main driver of Nigeria’s consumer-credit market, accounting for nearly two-thirds of outstanding credit.

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The increase came against a challenging operating environment for households and businesses. The CBN reported that economic activity remained weak in May, with its composite Purchasing Managers’ Index at 49.60 points, slightly higher than 49.40 points in April but still below the 50-point threshold separating expansion from contraction.

According to the bank, the contraction reflected subdued demand, declining new orders and elevated production costs. It also identified weak consumer spending and higher energy-related costs as pressures on the industry and services sectors.

Inflation also remained elevated during the period. Headline inflation increased to 15.93 per cent in May from 15.69 per cent in April, which the CBN attributed to persistent cost pressures and higher energy prices. However, month-on-month inflation slowed to 1.75 per cent from 2.13 per cent.

The combination of rising consumer credit and weak consumer spending suggests that households were increasingly accessing credit at a time when living and operating costs remained under pressure.

A recent report Enhancing Financial Inclusion & Advancement noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The 2026 Access to Financial Services in Nigeria Survey revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

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Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

However, the report found significant distress among borrowers. About 45.8 per cent of formal-credit users reported some or serious repayment stress, while 83.8 per cent experienced ongoing financial stress.

Source: punchng.com

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NAFDAC seizes N300m banned drinks in Lagos

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The National Agency for Food and Drug Administration and Control has seized alcoholic beverages worth an estimated N300m packaged in sachets and PET bottles below 200ml during enforcement operations in Lagos State.

NAFDAC disclosed this in a statement shared on its Facebook page on Sunday, adding that some distributors and retailers involved in the sale of the prohibited products were arrested.

The agency said the enforcement operations were carried out at Ile-Epo Market, Ojuwoye Market in Mushin and Oke-Arin Market on Lagos Island.

“Officials evacuated several cartons of alcoholic beverages packaged in sachets and PET bottles below 200ml from these locations.

“Distributors and retailers were arrested during operations at Ile-Epo Market, while raids were also conducted at Ojuwoye Market, Mushin, and Oke-Arin Market, Lagos Island,” the statement said.

NAFDAC said investigations revealed that some distributors and retailers were hoarding the prohibited products amid increased demand and rising prices.

The agency said the enforcement was part of efforts to ensure compliance with the ban on the sale and distribution of alcoholic beverages packaged in sachets and PET bottles below 200ml.

It warned distributors, retailers and other operators against selling, distributing or hoarding the prohibited products.

“NAFDAC emphasises that the ban remains in force and warns distributors, retailers and other operators against the sale, distribution or hoarding of the prohibited products.

“The value of the seized products is estimated at N300m,” it stated.

PUNCH Metro reported on August 25 that NAFDAC ordered manufacturers of banned alcoholic beverages packaged in sachets and polyethylene terephthalate bottles below 200ml to recall the products nationwide or risk closure of their facilities.

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NAFDAC had also vowed to fully enforce the Federal Government-approved prohibition of alcoholic beverages packaged in sachets and PET or plastic bottles below 200ml, warning that the ban was irrevocable.

The agency had stated that the years of grace given to manufacturers by the Federal Government to stop producing the products had expired.

Source: punchng.com

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