The Federal Government spent N9.39 trillion on wage adjustments, minimum wage increases and other allowances for public sector workers, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele has disclosed.
The disclosure comes as the Federal Government prepares for fresh negotiations with the Nigeria Labour Congress (NLC) next year over a new minimum wage for civil servants.
Speaking during a briefing, the minister said the government had mobilised N20.4 trillion in additional resources during the period under review through savings from fuel subsidy reforms, increased independent revenue and additional borrowing.
He explained, however, that the funds were quickly absorbed by rising government expenditure and were not retained as surplus resources.
According to him, the Federal Government’s incremental expenditure during the period stood at N30.64 trillion, significantly exceeding the additional resources generated.
Oyedele said personnel-related expenses accounted for N9.39 trillion of the spending, covering wage adjustments, increases in the national minimum wage and various allowances paid to public workers.
He stressed that the amount spent on higher wages exceeded the savings the Federal Government realised from the removal of the fuel subsidy.
“The incremental amount that the Federal Government spends paying higher wages is more than the entire savings that the Federal Government earned from subsidy removal,” he said.
The minister’s disclosure highlights the growing pressure that personnel costs are placing on government finances as workers’ earnings rise amid the country’s broader economic reforms.
Oyedele also revealed that N9.37 trillion was spent on servicing the government’s external debt during the period.
He attributed the sharp increase in the naira cost of debt servicing largely to the depreciation of the currency, noting that dollar-denominated obligations become significantly more expensive when converted into naira.
Using an illustration, he said a $1 billion debt obligation that previously cost about N460 billion to service would require roughly N1.415 trillion at the exchange rate of N1,415 to the dollar.
“When you have debt service to pay, you don’t negotiate, you don’t delay, you pay, because delay or default has consequences,” Oyedele said.
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