The Federal Government’s borrowing from domestic investors rose by 90.5 per cent year-on-year (YoY) to N24.7 trillion in the first eight months of 2026, compared with N12.98 trillion recorded in the corresponding period of 2025.
Findings by Financial Vanguard, based on public finance data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), also showed that credit to the government grew more than four times faster than credit to the private sector during the period.
The sharp increase in domestic borrowing came despite a significant rise in government revenue reported by key agencies, including the Nigerian Revenue Service, Nigeria Customs Service and Nigerian National Petroleum Company Limited (NNPCL). 
The government has also benefited from savings associated with the removal of petrol subsidies and increased naira proceeds following the floating of the exchange rate.
However, public finance analysts have raised concerns over extra-budgetary spending and other fiscal exposures, which they say may be contributing to the government’s growing financing needs and prompting increased borrowing from both domestic and external sources.
Govt credit grows 4.5 times faster than private-sector credit
The latest CBN money and credit data showed that credit to the government rose by 43 per cent YoY, from N23.69 trillion in July 2025 to N33.92 trillion in July 2026.
By contrast, credit to the private sector increased by only 9.6 per cent, from N76.13 trillion to N83.43 trillion over the same period.
This means credit to the government grew about 4.5 times faster than credit to the private sector.
The surge in Federal Government borrowing was driven largely by increased issuance of Federal Government of Nigeria (FGN) bonds, FGN savings bonds and Nigerian Treasury Bills (NTBs).
Borrowing through FGN bonds rose by 145 per cent YoY to N7.78 trillion in the first eight months of 2026, from N3.18 trillion in the corresponding period of 2025.
Similarly, borrowing through NTBs increased by 78.6 per cent to N16.92 trillion, from N9.47 trillion, while borrowing through FGN savings bonds rose by 22 per cent to N40.56 billion, from N33.18 billion.
Why FG is borrowing more
Experts who spoke to Financial Vanguard attributed the sharp increase to the government’s larger financing requirements amid a significant fiscal deficit, rising expenditure and higher debt-service obligations.
They, however, warned that increased reliance on the domestic market could crowd businesses and households out of available credit.
The Chief Executive Officer of MDU Capital Ltd, Ayodeji Ebo, said the increase reflected “larger financing requirements arising from high debt-service costs, recurrent expenditure, infrastructure and security needs, and a fiscal deficit that remains significant despite improved revenue.”
According to Ebo, the government may also be relying more heavily on the domestic market to reduce its exposure to foreign-exchange risks.
He, however, cautioned that not all NTB issuance should be regarded as fresh borrowing, noting that part of the issuance represents refinancing or rollover of maturing obligations.
Chief Economist, United Capital Plc, Ayodele Akinwunmi, identified infrastructure spending and the need to bridge fiscal deficits as major drivers of the increased borrowing.
He said the impact of the borrowing should also be assessed in relation to the infrastructure being financed.
“Across the country, we have witnessed significant growth in infrastructure development, ranging from physical projects, such as roads and railways, to soft infrastructure, including education, healthcare and security.
“These advancements have contributed positively to the ease of doing business, creating a more enabling environment for economic activity,” Akinwunmi said.
He noted that Nigeria’s infrastructure financing gap remained substantial, making it difficult for the government to rely solely on annual budgetary allocat
