In addition, rebels in the southern oil region have forced crude production cutbacks, and internal unrest, especially attacks by the Boko Haram group in the north.
The IMF slashed its growth forecast for the Nigerian economy this year on Tuesday, saying a combination of plunging oil revenues and weakened investor confidence will push it into recession.
The International Monetary Fund said it expects Africa's largest economy to contract by 1.8 percent this year, after having forecast in April a 2.3 percent expansion.
Nigeria's stall, and sluggish activity in the number two economy, South Africa, is expected to pull down economic growth across sub-Saharan Africa, the IMF said, forecasting a "dramatic implication."
"In 2016, regional output growth will fall short of population growth, implying declining per capita incomes," it said.
Nigeria's economy has been battered hard by the plunge in oil prices, the main source of the country's income, as well as prices of other key commodities.
In addition, rebels in the southern oil region have forced crude production cutbacks, and internal unrest, especially attacks by the Boko Haram group in the north, has also hurt the economy.
Inflation hit an 11-year high of 16.5 percent in June as prices of food and energy jumped after the government freed up the naira currency in April, allowing it to plummet against the US dollar.
Also weighing on output have been electricity shortages due to rebels' sabotage of the gas pipelines that fire power plants.