Nigeria’s Federal Government Borrowing Jumps 76% to ₦40.4 trn

The Central Bank of Nigeria (CBN) reported that credit to the Federal Government surged 75.6% year‑on‑year, reaching ₦40.38 trillion in May 2026 versus ₦22.99 trillion in May 2025 – an increase of about ₦17.4 trillion. On a month‑to‑month basis the figure rose by ₦779.7 billion in May. Private‑sector credit grew modestly to ₦81.04 trillion, remaining roughly twice the level of government credit.

Banks continue to channel liquidity into low‑risk government bonds and treasury bills, prompting concerns that high government borrowing could crowd out credit to businesses and households. At the same time, the Nigerian government is weighing a stricter cashless policy to curb kidnapper ransom payments, while cash held outside banks still exceeds ₦5 trillion (about 91% of total circulation).

Open‑Market Operation (OMO) bill maturities are expected to inject ₦3.39 trillion of liquidity into the banking system this week, with about 86% of the inflows coming from maturing OMO bills, helping to improve system liquidity after recent tightening.