Figures cited by Vanguard show a staggering 90.5 percent year-on-year increase in the Federal Government’s domestic borrowings, which surged to an unprecedented N24.7 trillion in the first eight months of 2026. This aggressive accumulation of local debt has begun to inflict severe collateral damage on the private sector, as government borrowing crowds out commercial entities from accessing much-needed credit. Manufacturers and small-scale enterprises are currently feeling the tightest squeeze, struggling to secure affordable financing to maintain or expand their operations.
*ThisDay* analyzed the knock-on effects of this trend, warning that “crowding out the private sector from the credit market will inevitably stifle indigenous entrepreneurship.” Taking a broader macroeconomic view, *The Nation* argued that the root of the problem remains unchecked fiscal deficits, asserting that “the N24.7 trillion domestic borrowing spree reflects a critical revenue shortfall that needs urgent fixing.”
**Echotitbits take:**
The government is essentially competing with the very businesses it hopes will drive economic recovery for the same limited pool of domestic capital. This high-interest borrowing environment is toxic for real sector growth and industrialization. Unless there is a massive recalibration towards expanding the tax net and reducing governance costs, private enterprises will continue to suffocate under prohibitive interest rates.
Source: Vanguard – https://www.vanguardngr.com/2026/09/businesses-suffer-as-fgs-domestic-borrowings-surge-90-to-n24-7trn/, September 7, 2026
Photo credit: TIME
