The Federal Government’s borrowing from the domestic financial system rose sharply over the past year, according to the latest figures released by the Central Bank of Nigeria (CBN).
The data revealed that credit extended to the Federal Government increased by 75.6 per cent, climbing from N22.99 trillion in May 2025 to N40.38 trillion in May 2026. This represents a year-on-year increase of N17.39 trillion.
On a monthly basis, government borrowing also recorded an upward trend, rising by N779.7 billion from N39.60 trillion in April 2026 to N40.38 trillion in May 2026.
The figures indicate that commercial and merchant banks continue to invest heavily in Treasury Bills and Federal Government bonds, highlighting the government’s growing dependence on domestic borrowing to support its fiscal obligations.
Meanwhile, lending to the private sector recorded only a slight increase during the same period, moving from N80.59 trillion in April to N81.04 trillion in May 2026. Although private sector credit remains significantly higher than government borrowing, its growth was considerably slower.
Economic analysts have expressed concern that banks’ increasing appetite for government securities could reduce the amount of credit available to private businesses. They warned that limited access to affordable financing may discourage investment and slow overall economic expansion.
The Central Bank of Nigeria is yet to publish a detailed sector-by-sector breakdown of private sector lending for the reporting period.
