Nigeria’s Treasury bill debt(T-Bills)has risen to a record of N10.4 trillion, growing by 60% in just three months, according to the Debt Management Office (DMO). 

This is the highest debt recorded level seen since at least 2010, as reported by Nairalytics

 In the first quarter of 2024, the DMO, worked with the central bank, to hold several auctions to sell more T-Bills.

This plan by the DMO is to manage inflation and secure money to pay the government’s immediate spending needs.

However, the DMO has stated that the increase in debt was due to the naira loosing its value.

Here are the 5 reasons Nigeria is still in debt

1. Over Dependence On Oil Revenue

Nigerian government relies on oil exportation to boost the economy, When oil prices go down, Nigeria earns less money, which affects its ability to pay for important public services. 

The government often borrows more money to manage this shortfall, increasing the nation’s debt.

Nigeria needs to diversify — that means investing in other sectors like renewable energy, agriculture, manufacturing, and technology. This diversification could lead to more jobs, promote innovation, and make the economy more stable.

2. Tax Transparency

Nigeria’s recent changes to its tax system were supposed to help the country reduce its debt. However, these changes have not worked as expected.

Many people believe that the money collected from taxes is being wasted on the luxurious lives of government officials instead of being used for important things like building hospitals, improving roads, and providing the basic needs of the citizens

 There is a strong need for the government to be more open and careful with how it spends tax money. People are paying a lot in taxes and they deserve to see real change in their communities.

3. Government Spending Concerns

The government is spending more money these days, and some of that spending doesn’t seem to help the economy much. For example, the government plans to buy a new private jet and spend a lot of money fixing up the Vice President’s living quarters. 

These expenses come from the federal budget, which is troubling because the economy isn’t doing very well. Many people think this kind of spending is unnecessary and that the money should go to more important areas like health, education, and fixing roads and bridges. 

This situation has made some people question if the government is really focusing on what the country needs.

4. External Borrowing

Nigeria’s increasing dependence on borrowing money from other countries to pay for its budget needs has led to growing foreign debt.

This debt is becoming more expensive to pay back because of rising interest rates and a falling currency value.

 This situation puts a strain on Nigeria’s finances. As the debt increases, it becomes harder for Nigeria to find enough money to cover these payments.

5. Economic Shocks:

 Events such as the COVID-19 pandemic and the Russia-Ukraine conflict have disrupted economic activities, decreased income, and required additional borrowing to handle the economic consequences.