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Businesses Suffer as FG’s Domestic Borrowing Surges 90% to ₦24.7trn
Businesses in Nigeria are facing increased pressure as the Federal Government’s borrowing from domestic investors surged by 90.5 per cent year-on-year...
By Wavers News
The amount represents a significant increase from the ₦12.98 trillion borrowed during the corresponding period of 2025.
The sharp rise in government borrowing has occurred alongside slower growth in credit to the private sector, raising concerns over the availability of funds for businesses and households.
Data from government financial sources showed that credit to the Federal Government increased by 43 per cent year-on-year to ₦33.92 trillion in July 2026, up from ₦23.69 trillion recorded in July 2025.
By comparison, credit to the private sector rose by only 9.6 per cent over the same period, increasing from ₦76.13 trillion to ₦83.43 trillion.
This means government credit grew about 4.5 times faster than private-sector credit during the period.
The increase in domestic borrowing was driven largely by higher issuance of Federal Government bonds, Nigerian Treasury Bills and FGN Savings Bonds.
Borrowing through FGN bonds rose by 145 per cent year-on-year to ₦7.78 trillion in the eight months to August 2026, compared with ₦3.18 trillion during the same period of 2025.
Treasury Bills borrowing also increased by 78.6 per cent, rising from ₦9.47 trillion to ₦16.92 trillion.
FGN Savings Bonds recorded a 22 per cent increase, climbing to ₦40.56 billion from ₦33.18 billion.
Concerns Over Access to Credit
The increased borrowing comes despite a substantial rise in government revenue from several major sources, including the Nigerian Revenue Service, Nigerian Customs Service and Nigerian National Petroleum Company Limited.
The government has also benefited from savings following the removal of petrol subsidies and increased naira proceeds associated with the floating of the exchange rate.
However, concerns over additional spending and other fiscal obligations have raised questions about the government's financing needs and its continued reliance on borrowing.
Economists and financial experts have warned that the government's growing appetite for domestic funds could make it harder for businesses and households to access available credit.
Higher borrowing could also increase debt-service obligations and place additional pressure on government finances, potentially limiting the funds available for important areas such as infrastructure, education and healthcare.
FG Nears 2026 Domestic Borrowing Target
The 2026 budget provides for total Federal Government expenditure of ₦68.32 trillion against projected revenue of ₦36.87 trillion, leaving a fiscal deficit of ₦31.45 trillion.
Of that deficit, ₦29.20 trillion is expected to be financed through domestic and external borrowing, while other funding is expected to come through multilateral and bilateral project-linked loans and proceeds from privatisation.
With ₦24.7 trillion already borrowed domestically during the first eight months of the year, the government has reached about 84.7 per cent of its ₦29.2 trillion borrowing target.
That leaves approximately ₦4.5 trillion to be raised during the remaining four months of 2026.
At the average pace of about ₦3.08 trillion borrowed monthly between January and August, maintaining the current trend could push government borrowing beyond the annual target.
The development has renewed concerns about the impact of increased government borrowing on businesses, households and the broader economy, particularly at a time when private-sector operators continue to seek affordable financing for investment and expansion.