ABUJA, Nigeria — Nigeria’s federal government raised N24.7 trillion from the domestic market in the first eight months of 2026, almost twice the amount recorded during the same period last year, as authorities relied heavily on bonds and Treasury Bills to finance a widening budget gap.
The figure was 90.5 percent higher than the N12.98 trillion raised between January and August 2025, according to data compiled from the Debt Management Office and the Central Bank of Nigeria. The increase has renewed debate over whether heavy government borrowing is making credit more expensive and less available to businesses and households.
Treasury Bills accounted for the largest share of the borrowing, rising to N16.92 trillion from N9.47 trillion a year earlier. Federal government bond issuance climbed to N7.78 trillion from N3.18 trillion, while FGN Savings Bonds increased to N40.56 billion.
The rise does not mean that all N24.7 trillion represents entirely new debt. Some Treasury Bill and bond issuance is used to refinance securities that have matured, meaning part of the total reflects the rollover of existing obligations rather than fresh borrowing. Economist Ayodeji Ebo said that distinction is important when assessing the scale of the government’s financing needs.
Even so, central bank figures show that credit to the government is expanding much faster than lending to the private sector. Government credit increased 43 percent from a year earlier to N33.92 trillion in July, while private sector credit rose 9.6 percent to N83.43 trillion.
Analysts say the trend could create what economists call a crowding out effect, where banks and large investors prefer government securities because they are generally considered safer than loans to companies. Ebo warned that stronger demand from the government could divert funds that might otherwise be available to businesses seeking money to expand, buy equipment or hire workers.
The borrowing comes as Nigeria tries to finance one of its largest budgets on record. The 2026 spending plan provides for expenditure of N68.32 trillion against projected revenue of N36.87 trillion, leaving a deficit of about N31.45 trillion. Roughly N29.2 trillion of that gap is expected to be financed through domestic and external borrowing.
Nigeria has struggled for years with low public revenue relative to the size of its economy, prompting successive governments to borrow to finance infrastructure, security and basic public services. Since President Bola Tinubu took office in 2023, his administration has removed the petrol subsidy, overhauled the foreign exchange system and pursued tax reforms aimed at improving government finances.
Supporters of higher borrowing argue that debt can support economic growth when the money is invested in roads, railways, health care, education and other productive projects. United Capital Chief Economist Ayodele Akinwunmi said infrastructure investment can improve the business environment and help create jobs, particularly in a country facing a large infrastructure financing gap.
But the rapid pace of borrowing is likely to keep pressure on the government to show that the money is being used effectively. With N24.7 trillion already raised in eight months, attention will increasingly turn to debt servicing costs, budget implementation and whether businesses can still obtain affordable financing as the government continues to draw heavily from Nigeria’s domestic financial market.
