The data from the June 2022 Money and Credit Statistics published by the Central Bank of Nigeria (CBN) shows that the net credit to the economy rose to N57.3 trillion at the end of June 2022 from N48.5 trillion at the end of December 2021, indicating an 18.02 percent increase in the first half of 2022 (H1 ’22).3 Credit to the government accounts for about 31.4 percent of total credit, while the private sector received the remaining. The banking sector credit to the government grew by 35.04 percent from N13.3 trillion as of December 2021 to N18.0 trillion at the end of June 2022. Further, the credit to the private sector grew by 11.58 percent from N35.2 trillion as of December 2021 to N39.3 trillion at the end of June 2022. This suggests that banking sector credit to the government grew at a higher rate compared to the private sector. The rise in credit to the government is consistent with the rise in government debt, which raises a concern about the crowding out effect of government borrowing in the domestic financial market on the ability of the private firms to secure funding for productive investments. Consequently, there is a need for the government to boost revenue collection and promote the use of innovative financing options to effectively fund the rising expenditure and curtail the rate of borrowing in the domestic financial market. In addition, there is a need for the government to prevent the mismanagement of borrowed funds by strengthening transparency in the debt management process.