The Federal Government has indicated that its spending on personnel costs will increase by at least 60 per cent in 2025.
It said this is due to the implementation of the new national minimum wage and consequential adjustments for all cadres of the federal civil service.
Checks by our correspondent showed that N4.1tn was budgeted as personnel expenditure in the 2024 budget, hence a 60 per cent increase means an additional N2.46tn and a total sum of N6.56tn.
This was disclosed in the newly released 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper obtained by our correspondent on Sunday.
The document approved by the Federal Executive Council last Thursday facilitates the alignment of policy objectives with the available financial resources.
In July 2024, President Bola Tinubu approved an increase in the minimum wage for Nigerian workers from N30,000 to N70,000.
Checks by our correspondent showed that federal workers have started receiving the new wage.
However, the implementation across states has been gradual, with some still yet to adopt the new minimum wage.
While a number of states have pledged to meet the N70,000 minimum wage, others have gone further, committing to pay amounts higher than the federal mandate.
Although more than 20 states have announced the implementation of the new minimum wage, the Nigerian Labour Congress last week gave non-compliant state governments an ultimatum of December 1, 2024, to implement the new minimum wage.
In the MTEF report, the government said N2.67tn, representing 65 per cent of the N4.10tn appropriated in the 2024 Budget, has been disbursed as of August.
It further envisioned that personnel cost expenditure will increase by 60 per cent next year.
The report read, “The 2025 FGN personnel cost expenditure is expected to increase significantly to align with the updated National Minimum Wage.
“The personnel cost for FY2023 was N3.83tn. As of July, the figure for FY2024 is N2.67tn, 65 per cent of the N4.10tn appropriated in the 2024 Budget. For 2025, the personnel cost is projected to increase by about 60 per cent due to adjustments in minimum wage and consequential adjustments, which will directly impact employees’ salaries.
“Also, the employee and employer contributions to pension and NHIS will be affected as part of the personnel cost.”
The government also provided a total sum of N9.64tn for personnel and pension costs.
It added, “N9.64tn (including N1.02tn for GOEs) is provided for personnel and pension costs. This is an increase of N3.56tn or 58.7 per cent over the 2024 provision and is mainly due to the implementation of the new minimum wage and its consequential adjustments.”
Meanwhile, the government has emphasised that the new minimum wage payment and increased debt costs are reasons for the 2025 budget deficit of 3.87 per cent to the Gross Domestic Product.
It explained, “The budget deficit is projected to be N13.08tn in 2025, from N9.18tn estimated for 2024. This represents about 38 per cent of total FGN revenues and 3.87 per cent of the estimated GDP.
“The deficit is due to the increased new minimum wage, pension obligation, and other consequential adjustments, and increased debt costs.
“The administration aims to lower the deficit levels to the threshold stipulated in the FRA 2025 within the medium term. The deficit will largely be financed by domestic borrowings, considering the narrow window for external financing.”
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.
