ABUJA, Nigeria — Former Vice President Atiku Abubakar has accused President Bola Tinubu’s government of sharply increasing domestic borrowing, saying the practice is competing with Nigerian businesses for available credit and could worsen unemployment, production costs and pressure on households. Atiku, the African Democratic Congress presidential candidate, made the accusations in a statement released Monday through his senior public communications aide, Phrank Shaibu.
Atiku said the federal government borrowed 24.7 trillion naira from the domestic market between January and August 2026, compared with 12.98 trillion naira during the same period in 2025, an increase of about 90.5%. He questioned why borrowing was accelerating when crude oil prices had risen above the government’s 2026 budget benchmark of S64.85 per barrel. “Where is the money going?” Atiku asked, arguing that higher oil earnings and increased government revenues should reduce reliance on debt.
The former vice president said government borrowing is growing much faster than lending to businesses, citing figures showing credit to government rising 43% while private-sector credit grew 9.6%. He argued that banks and institutional investors have an incentive to buy relatively low-risk, high-yield government securities instead of extending affordable loans to manufacturers, farmers and entrepreneurs.
Economists commonly describe that problem as “crowding out,” which occurs when heavy government borrowing absorbs funds that might otherwise be available for private investment. For businesses, tighter credit can mean higher interest costs, delayed expansion and fewer new jobs. Atiku said the effect ultimately reaches consumers because companies facing higher financing and production costs may raise prices for goods and services.
Tinubu’s administration has defended borrowing as a legitimate tool for financing government priorities when debt can be serviced responsibly. Speaking in April, Tinubu said borrowing should not automatically be regarded negatively, adding: “Borrowing is not leprosy; we just have to work hard to be able to pay for it.” His government has also maintained that economic changes introduced since 2023, including the removal of the petrol subsidy and foreign exchange reforms, were necessary to improve public finances and put the economy on a more sustainable footing.\
The dispute comes against a longer struggle to strengthen Nigeria’s private sector despite high financing costs, unreliable infrastructure and dependence on imported inputs. Manufacturers have increasingly sought local alternatives as currency volatility and elevated operating costs put pressure on production. As Africa’s most populous country and one of its largest economies, Nigeria’s ability to balance government financing with affordable private-sector credit also matters to regional trade, investment and industrial development.
Atiku said a government led by him would pursue tighter fiscal discipline, reduce waste and gradually lower dependence on the domestic credit market, arguing that businesses need greater access to capital to expand production and employment. The competing positions are likely to feature prominently in the economic debate ahead of Nigeria’s 2027 election, as voters weigh the Tinubu administration’s reform record against opposition claims that the benefits have not reached enough businesses and households.
