The amount allocated for personnel costs, including salaries and allowances for state civil servants, has surged significantly from N2.036 trillion in 2024 to N3.87 trillion in the approved 2025 budget, 9am news reports
According to budget implementation reports, the 36 states initially allocated N2.8 trillion for salaries in 2024 but ended up spending only N2.036 trillion, reflecting a N764 billion shortfall. This increase in expenditure is driven by the newly approved N70,000 minimum wage and a growing number of political appointments, marking a nearly 90.23% rise in personnel costs.
Data from Open States, a BudgIT-backed repository, shows that at least 27 states would struggle to pay workers’ salaries in 2025 without federal allocations. President Bola Tinubu approved the minimum wage hike in July 2024, following intense negotiations with labor unions. However, implementation has been slow, with several states yet to comply fully. The Nigerian Labour Congress issued a December 1, 2024, ultimatum for compliance, yet some states have still not adjusted their payroll structures.
Budget analysis highlights stark differences in personnel cost increases across states. While 20 states saw over a 50% rise in wage bills, 16 recorded smaller increases. Some states, including Abia, Cross River, Ekiti, Niger, Rivers, and Taraba, reported over a 100% increase in payroll expenses.
Abia’s personnel costs jumped from N33.045 billion to N77.34 billion, a 134% rise. Cross River recorded one of the highest increases, from N35.02 billion to N106.12 billion, reflecting a 202% surge. Niger State experienced the most significant growth, leaping from N25.36 billion to N104.301 billion, a staggering 311.5% increase.
Meanwhile, Lagos recorded the highest personnel expenditure in absolute terms, rising from N225.114 billion to N401.12 billion. Rivers followed closely, with personnel costs climbing from N167.05 billion to N343.196 billion, marking a 105.6% jump.
In contrast, Gombe State saw the lowest change, with personnel costs dipping slightly from N40.52 billion to N40.28 billion, a marginal 0.6% decline.
The rapid rise in wage bills underscores the financial strain on state governments as they attempt to meet salary obligations while grappling with economic constraints. Without increased revenue streams or federal interventions, many states may struggle to sustain the new wage structure, leading to further delays in salary payments and potential industrial actions.
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