Atiku Accuses FG of Borrowing ₦24.7tn as Businesses Struggle for Credit
Former Vice-President and 2027 presidential contender Atiku Abubakar has criticised the Federal Government over the scale of its domestic borrowing, arguing that increased government demand for funds is making it more difficult for Nigerian businesses to access affordable credit.
Atiku's criticism centres on a figure of approximately ₦24.7 trillion reportedly borrowed from the domestic market between January and August 2026.
According to the former vice-president, the amount represents a substantial increase compared with the approximately ₦12.98 trillion borrowed during the corresponding period of 2025.
He argued that the development was difficult to reconcile with the government's earlier economic reforms, including the removal of petrol subsidy and changes to the foreign-exchange regime.
Atiku also questioned why borrowing remained so high at a time when crude-oil prices had risen above the benchmark used in the 2026 budget.
The former vice-president's comments are political claims and should be distinguished from independently established evidence that government borrowing has directly caused individual businesses to lose access to credit.
Nevertheless, the underlying issue—how government borrowing interacts with private-sector financing—is economically important.
When governments borrow heavily from domestic financial markets, they compete for available funds alongside businesses and households.
If banks and investors find government securities attractive because of their yields and perceived safety, private borrowers may face higher financing costs or reduced access to credit.
This phenomenon is commonly described as crowding out.
Whether the current Nigerian situation amounts to significant crowding out is a matter that requires detailed economic data, including lending rates, bank liquidity, private-sector credit growth and government securities yields.
What Atiku is alleging
Atiku argues that the Federal Government's domestic borrowing has reached a level that is putting pressure on Nigerian businesses.
His position is that government borrowing is competing with private-sector borrowers for available funds.
He says the consequence is reduced access to credit for businesses and, ultimately, pressure on employment.
The argument is particularly relevant to small and medium-sized enterprises.
These businesses often rely heavily on bank loans and working-capital facilities.
A manufacturing company may need financing to purchase raw materials.
A trader may require credit to increase inventory.
A transport company may need financing to purchase vehicles.
A technology company may need capital to expand.
If credit becomes too expensive, these businesses may postpone investment.
That can affect job creation.
The ₦24.7tn figure
According to Atiku's statement, the Federal Government borrowed approximately ₦24.7 trillion from the domestic market between January and August 2026.
He compared that with about ₦12.98 trillion during the same period in 2025.
If those figures are confirmed on the relevant official debt and borrowing records, the increase represents a substantial expansion in domestic borrowing.
However, interpreting borrowing figures requires care.
Government borrowing can include different instruments.
It can involve bonds, Treasury instruments and other forms of domestic financing.
Some borrowing may also refinance existing obligations rather than represent entirely new spending.
Therefore, the gross amount borrowed does not necessarily equal the government's net increase in debt.
This distinction is important in evaluating fiscal policy.
Why government borrows
Government borrowing is not inherently negative.
Every major economy uses borrowing at different times.
Governments borrow to finance infrastructure.
They borrow to cover temporary revenue shortfalls.
They refinance maturing debt.
They may borrow during economic crises.
They may borrow to fund capital projects expected to generate future economic returns.
The problem arises when borrowing becomes excessive relative to government revenue and the economy's ability to service the debt.
At that point, debt-service costs can consume an increasing share of government resources.
The argument about oil prices
Atiku's criticism also focuses on crude-oil prices.
The 2026 federal budget was based on a particular oil-price benchmark.
If actual prices rise substantially above that benchmark, government revenue could potentially improve, depending on production volumes, fiscal terms, costs and other factors.
Atiku argues that higher oil prices should have reduced the government's need to borrow.
But oil revenue is not determined by price alone.
Nigeria's production volume matters.
Government's share of production matters.
Operational costs matter.
Oil-sector liabilities matter.
Exchange rates also influence the naira value of foreign-currency revenue.
Therefore, a higher international oil price does not automatically translate into an equivalent increase in freely available government cash.
Subsidy removal and government finances
Atiku also referred to the removal of petrol subsidy.
The policy change was originally presented as a way to reduce government expenditure and redirect resources.
Removing a subsidy can reduce one category of government spending.
However, the government can still face substantial expenditure requirements.
Security remains expensive.
Infrastructure requires funding.
Personnel costs continue.
Debt servicing requires money.
Social programmes also require financing.
Therefore, eliminating one major expenditure does not automatically eliminate the need for borrowing.
Why the question matters
The political argument is ultimately about what government does with borrowed money.
Borrowing can be productive if it finances infrastructure and investments that increase future economic capacity.
For example, spending on electricity infrastructure could help businesses reduce operating costs.
Road investment could reduce transportation costs.
Rail infrastructure could improve logistics.
Water infrastructure could support agriculture and industry.
But borrowing to finance recurrent consumption without creating corresponding economic value can create a heavier burden for future governments.
Businesses and access to credit
Nigerian businesses have long complained about high borrowing costs.
Commercial lending rates can be substantially higher than rates available to governments.
This creates a difficult environment for entrepreneurs.
A business owner may identify a profitable opportunity but conclude that the cost of borrowing makes the project unviable.
For small businesses, the problem can be even more severe.
Many lack collateral.
Some have irregular income.
Others operate informally.
Banks therefore perceive them as higher-risk borrowers.
The crowding-out argument
The concept of crowding out is straightforward.
Imagine a financial system with a limited pool of available funds.
The government wants to borrow a large amount.
Businesses also want loans.
If the government offers attractive returns on its securities, banks and investors may allocate more money to government instruments.
Businesses may then have to compete for the remaining funds.
Interest rates can rise.
Private investment may slow.
This is the mechanism Atiku is referring to.
But the strength of the effect depends on the amount of liquidity available in the banking system and the behaviour of banks and investors.
Nigeria's banking liquidity
Nigeria's financial system has recently experienced substantial liquidity movements.
The banking system has had periods of surplus liquidity, while the Central Bank has also used monetary-policy tools to manage conditions.
This complicates the simple argument that government borrowing automatically means there is no money available for businesses.
There can be abundant liquidity in the banking system while banks still remain cautious about lending to certain categories of businesses.
Risk perception, collateral requirements and monetary policy all matter.
Why banks prefer government securities
Government securities are often attractive to banks because they carry relatively low perceived credit risk compared with lending to small businesses.
A bank lending to a small enterprise faces the possibility of default.
The bank may need to recover collateral.
It may face legal costs.
Government securities generally provide a more predictable repayment structure.
This can influence banks' asset-allocation decisions.
The cost to entrepreneurs
For entrepreneurs, expensive credit can reduce expansion.
A business that could employ 20 people might employ five.
A manufacturer may operate below capacity.
A farmer may cultivate less land.
A trader may stock fewer goods.
The economic impact can therefore be substantial even when individual loans appear relatively small.
Employment consequences
Atiku's argument that borrowing is "killing jobs" is a political characterization rather than an independently established causal finding.
However, the relationship between credit and employment is economically plausible.
Businesses need capital to expand.
Expansion often requires workers.
If businesses cannot obtain affordable financing, investment can slow.
That can affect employment growth.
But employment also depends on consumer demand, productivity, taxation, infrastructure, energy costs and other factors.
It would therefore be too simplistic to attribute Nigeria's entire employment situation to government borrowing.
Inflation and borrowing
Government borrowing can also interact with inflation.
If borrowing is financed in ways that increase money supply or stimulate demand without corresponding increases in production, inflationary pressure can rise.
However, borrowing through domestic securities does not automatically have the same inflationary effect as direct monetary financing.
The precise impact depends on how the borrowing is structured and how the funds are spent.
Debt service
One of Nigeria's biggest fiscal concerns is debt servicing.
The government must pay interest and principal on its obligations.
When debt grows rapidly, interest payments can consume a larger share of government revenue.
This reduces the money available for other priorities.
The challenge is therefore not simply the size of debt.
It is the relationship between debt and revenue.
Revenue is crucial
A government with high revenue may be able to sustain a larger debt burden than a government with low revenue.
Nigeria's revenue-to-GDP ratio has historically been relatively low compared with many economies.
This means the government has limited fiscal space.
Increasing revenue through better tax administration and economic growth can improve debt sustainability.
The tax question
Nigeria's tax reforms are therefore closely connected to the borrowing debate.
If government revenue increases, borrowing requirements can decline.
But tax increases can also impose costs on households and businesses.
The challenge is to improve compliance without damaging economic activity.
A broader tax base may be preferable to simply increasing rates on businesses already paying taxes.
Oil dependence
Nigeria's dependence on oil revenue also complicates fiscal planning.
Oil prices fluctuate.
Production can be affected by security problems and operational challenges.
Global energy markets can change quickly.
This makes it difficult to rely exclusively on oil revenue for government expenditure.
Diversifying government revenue is therefore important.
What government borrowing can achieve
The debate should not focus only on how much government borrows.
It should also ask what the money is being used for.
Borrowing to build productive infrastructure can potentially stimulate economic growth.
Borrowing to cover inefficient expenditure can create long-term problems.
Therefore, transparency around borrowing is essential.
Citizens should know:
How much is borrowed?
From whom?
At what interest rate?
For what purpose?
Over what period?
What project or expenditure is being financed?
How will repayment be funded?
Atiku's political context
Atiku is currently positioning himself within the 2027 political contest.
His criticism of government borrowing is therefore part of a broader political argument about the direction of the Nigerian economy.
Political opponents of the administration have criticised economic hardship, inflation and public debt.
Government supporters have defended the reforms and argued that difficult adjustments were necessary to stabilise the economy.
Voters will ultimately assess these competing claims.
The need for evidence
Political debate is useful when supported by evidence.
The government should publish clear borrowing data.
It should show how much has been raised domestically.
It should distinguish refinancing from new borrowing.
It should explain the use of proceeds.
That would allow economists and citizens to evaluate the government's fiscal position independently.
What businesses need
Regardless of the political argument, Nigerian businesses need affordable financing.
They also need electricity.
They need reliable transportation.
They need predictable taxes.
They need foreign-exchange stability.
They need security.
Credit alone cannot solve all business problems.
But affordable credit can help businesses invest and expand.
Small-business financing
Government-backed financing programmes can help bridge the gap.
Development-finance institutions can provide targeted loans.
Credit guarantees can reduce banks' risk.
Digital financial records can improve credit assessment.
However, such programmes must be managed transparently.
Cheap credit that is politically allocated can create new problems.
The importance of private investment
Nigeria needs private-sector investment to complement government spending.
The private sector creates jobs.
Businesses produce goods.
Companies pay taxes.
Entrepreneurs develop new services.
Government therefore needs to create conditions that encourage private investment.
Infrastructure and borrowing
Atiku's criticism should not be interpreted as an argument that government should never borrow.
Nigeria has enormous infrastructure needs.
Roads require funding.
Power infrastructure requires funding.
Railways require funding.
Healthcare facilities require investment.
Education infrastructure requires resources.
The challenge is to ensure that borrowing produces economic value.
What happens if borrowing continues rising?
If domestic borrowing continues to increase rapidly, the government could face higher debt-service obligations.
Banks may allocate more assets to government securities.
Private borrowers may face higher costs.
Investor confidence could also become sensitive to fiscal sustainability.
But the opposite is also possible if borrowed funds are invested productively and economic growth increases.
The government's response
The administration will ultimately need to explain its borrowing strategy.
It can argue that borrowing is financing capital projects.
It can explain that debt is being used to support economic transformation.
It can provide evidence of improved revenue.
The strongest response would be transparent fiscal data.
By Iroyin Yoruba Television Politics and Economy Desk