Nigeria TV Info 

FG’s ₦9tn Domestic Loans Surge Drains Lifeline From Businesses

The Federal Government’s domestic borrowing rose sharply by about ₦9 trillion, intensifying pressure on Nigeria’s financial system and reducing credit available to businesses. Data from monetary authorities indicate that banks increasingly channel funds into government securities due to attractive yields and lower risk, leaving private sector operators struggling to access affordable loans.

Economic analysts warn that this trend is worsening the “crowding-out effect,” where heavy government borrowing limits funds for manufacturers, SMEs and other productive sectors. With interest rates remaining high, many firms have scaled back expansion plans, cut production and delayed investments, citing rising financing costs and shrinking working capital.

Industry groups, including manufacturing associations, say the situation threatens job creation, industrial output and economic growth. They have urged the government to reduce reliance on domestic borrowing, improve revenue generation, and implement policies that encourage banks to increase lending to the real sector.

Experts also caution that sustained borrowing could further raise debt servicing costs and weaken fiscal stability, calling for urgent fiscal discipline and structural reforms to restore confidence and boost private sector-led growth.