The International Monetary Fund (IMF) has warned that rising transportation expenses are intensifying the cost-of-living crisis in Nigeria, as higher logistics costs continue to push food prices upward while limiting the government’s ability to respond through fiscal measures.
The warning was issued during the 2026 Spring Meetings of the International Monetary Fund and the World Bank held in Washington, D.C.. Speaking at a media briefing on the regional economic outlook for Sub-Saharan Africa, Abebe Aemro Selassie highlighted how escalating transport costs are placing additional strain on Nigerian households.
Transport costs driving food inflation
According to Selassie, Nigeria’s inflationary pressures are largely being fueled by rising food prices, which form a significant portion of the country’s consumer spending basket. Because food supply chains depend heavily on transportation, increases in fuel and logistics costs quickly translate into higher prices for essential commodities.
He explained that recent increases in fuel prices—linked to rising global crude oil prices—have pushed pump prices upward, raising distribution costs across the economy.
These higher logistics costs are being transmitted throughout supply chains, contributing to instability in food prices and increasing the financial burden on households nationwide.
Households facing growing economic pressure
The IMF noted that transport costs are rising sharply in both urban and rural areas, worsening living conditions as households struggle with higher food and general living expenses.
Beyond inflation, the Fund also warned that the economic shocks are disrupting food production and distribution systems. Higher logistics expenses, rising agricultural inputs such as fertilizer, and supply bottlenecks are all contributing to increased production and distribution costs.
Fiscal reforms providing limited buffers
Despite these challenges, Selassie acknowledged that recent fiscal and debt reforms undertaken by Nigeria are beginning to strengthen the country’s economic resilience.
Efforts aimed at stabilising public finances are helping create modest buffers that allow the government to absorb some of the external shocks affecting the economy.
However, he cautioned that policy responses must be carefully managed to ensure that short-term relief measures do not undermine medium-term fiscal sustainability or reverse ongoing economic reforms.
Debt sustainability remains a key priority
On public debt strategy, the IMF emphasised that Nigeria should focus primarily on maintaining debt at sustainable levels relative to its repayment capacity rather than prioritising either domestic or external borrowing.
Selassie stressed that prudent borrowing decisions, balanced debt maturities, and effective debt management remain critical for maintaining macroeconomic stability and sustaining investor confidence.
Trade reforms key to long-term resilience
Meanwhile, Amadou Sy noted that the African Continental Free Trade Area has strong potential to support economic diversification and improve resilience across the continent.
However, he said progress has been uneven due to unresolved issues such as rules of origin and tariff negotiations, which continue to slow the pace of implementation.
Sy added that improving customs systems, expanding access to trade finance, and accelerating trade reforms will be essential to unlocking the full benefits of continental trade integration.
Outlook
The IMF concluded that while Nigeria’s ongoing fiscal reforms are strengthening economic buffers, rising transport costs and supply chain pressures remain key drivers of the country’s cost-of-living crisis, highlighting the need for carefully balanced policy responses that protect households without undermining long-term economic stability.
