CBN Reports N17.4tn Surge in Federal Government Borrowing

The Central Bank of Nigeria (CBN) reported that the total credit to the federal government surged to N40.38 trillion by May 2026, up from N22.99 trillion in the same period in 2025, marking a year-on-year increase of N17.39 trillion, which represents a massive 75.6% rise. The government's borrowing momentum showed no signs of slowing down, with an increase of N779.70 billion in just 30 days, up from N39.60 trillion reported in April 2026.

The banking sector data indicated that commercial and merchant lenders continued to allocate significant liquidity towards government securities rather than channeling funds into the wider economy. This trend reflects a strategic shift by fiscal authorities seeking alternative funding sources through domestic debt issuance, contrasting with the modest growth in private sector credit, which rose to N81.04 trillion in May 2026 from N80.59 trillion in April.

Economists caution that the prioritization of high-yield government debt could crowd out private industry, hindering local businesses' access to affordable credit.