The Federal Government’s domestic borrowing rose sharply by 90.5 per cent year-on-year to N24.7 trillion between January and August 2026, up from N12.98 trillion recorded during the same period in 2025.
The increase has raised concerns over the availability of credit for businesses and households, as government borrowing has grown significantly faster than lending to the private sector.
Data from the Debt Management Office and the Central Bank of Nigeria showed that credit to the government increased by 43 per cent to N33.92 trillion in July 2026, compared with N23.69 trillion a year earlier. In contrast, private-sector credit grew by just 9.6 per cent to N83.43 trillion.
The surge in government borrowing was largely driven by increased issuance of Federal Government bonds, Nigerian Treasury Bills and FGN Savings Bonds. Borrowing through FGN bonds increased by 145 per cent to N7.78 trillion, while Treasury Bills rose by 78.6 per cent to N16.92 trillion.
Experts said the rising borrowing reflects the government’s need to finance its budget deficit, meet higher expenditure and service its growing debt obligations. However, they warned that continued reliance on domestic borrowing could encourage banks and other investors to favour government securities over lending to private businesses.
The development could keep borrowing costs high for companies and make it more difficult for businesses to obtain funds for expansion and other activities.
Under the 2026 budget, the Federal Government plans to spend N68.32 trillion against projected revenue of N36.87 trillion, leaving a deficit of N31.45 trillion. About N29.2 trillion of the financing requirement is expected to come from domestic and external borrowing.
Experts also warned that rising debt-service costs could reduce the funds available for important sectors such as infrastructure, healthcare and education.
