Businesses suffer as FG borrows N24.7trn in eight months

The Federal Government increased domestic borrowing by 90.5 per cent year-on-year to N24.7 trillion in the eight months to August 2026 — already representing 84.7 per cent of its full-year N29.2 trillion domestic borrowing target — raising alarm among financial experts about crowding out private sector credit, according to Financial Vanguard findings from DMO and CBN data.

Credit to government grew 4.5 times faster than credit to the private sector during the period, with government credit rising 43 per cent to N33.92 trillion while private sector credit grew only 9.6 per cent to N83.43 trillion in July 2026.

The borrowing surge was driven primarily by FGN Bonds, which rose 145 per cent to N7.78 trillion, and Nigerian Treasury Bills, which climbed 78.6 per cent to N16.92 trillion.

Experts warned the trend could reduce government capacity to fund infrastructure, education and health while squeezing businesses and households from available credit.