Despite improved revenue accruals to the Federation Account associated with the ongoing fiscal reforms, borrowings by the Federal Government had been on the surging trend over the past months, rising to N40.38trn as of the end of May 2026.
The just published monetary and credit statistics by the Central Bank of Nigeria (CBN) showed that total credit to the government increased to N40.38tn in May 2026, up from the N22.99tn debt stock in the corresponding period of 2025.
The latest figures represent a year-on-year increase of N17.39tn and 75.6 per cent rise in lenders’ exposure to the public sector but on a month-on-month basis, the government’s borrowing rose by N779.70bn from the N39.60tn reported in April 2026.
According to the apex bank’s data, the sustained rise in public sector credit reflects a new move by fiscal authorities to seek alternative funding through domestic debt issuance rather than sourcing funds directly from the CBN financing.
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The borrowing data reflected that lenders’ credit to the organized private sector in the month under review slightly rose to N81.04tn, compared to N80.59tn in April, indicating that the lenders cautiously improved credit to the real economy.
But then, despite this slightly increase in monthly credit to the businesses in May, the OPS’ credit remained dominant in absolute terms at roughly 2.01 times the public sector credit in the month under review.
A further analysis of the CBN’s report revealed that that commercial and merchant lenders were more positively disposed to committing their credit to low-risk government’s securities such as the Federal Government bonds and Treasury Bills to help finance ongoing fiscal operations.
