N70,000 minimum wage: States’ salaries increase by 90% to N3.8 trillion.

The amount planned for human costs, including wages and allowances for state government officials, has risen from N2.036 trillion in 2024 to N3.87 trillion in the proposed 2025 budget.

Although the 36 sub-nationals allotted a total of N2.8 trillion for salaries, they only paid out N2.036 trillion in the first 12 months of 2024, a drop of N764 billion, according to the budget implementation report.

According to statistics gathered from the 36 state governments’ authorised budgets for 2025, the rise caused by the implementation of the newly approved N70,000 minimum salary and soaring political appointments represents a nearly 90.23 percent increase.

The approved budgets are also available on Open States, a BudgIT-backed website that serves as a repository for government budget data.
According to the budget projections, at least 27 states will be unable to pay workers’ salaries this year unless they get federal funds from the central government.

In July 2024, President Bola Tinubu formally approved a huge raise in Nigerian workers’ minimum pay, from N30,000 to N70,000.
This decision followed months of intense talks and negotiations between the government and labour organisations.
However, the implementation of this wage hike has been sluggish throughout the country, with some states still to embrace the new minimum wage.

In reaction to the delay, the Nigerian Labour Congress issued a severe ultimatum to state governments, requiring them to completely implement the new wage structure by December 1, 2024.
Despite this pressure, numerous states have delayed to begin paying the new minimum wage, delaying the financial benefit that workers expected.

An in-depth review of the budget document revealed considerable disparities in staff expenditures between states: 20 states saw people expenses climb by more than 50%, while 16 states witnessed a more modest rise, with compensation hikes remaining below the 50% threshold.

A more detailed breakdown revealed that Abia, Cross Rivers, Ekiti, Niger, Rivers, and Taraba states received the biggest payroll increases, reaching 100% of their 2024 personnel cost allocation. While Gombe, Osun, and Ondo received the lowest salary rise percentages, scoring less than 15%.

Following a thorough analysis of the compensation increases throughout each state, Abia approved a significant increase in its personnel costs, increasing from N33.045 billion to N77.34 billion, indicating a 134% increase. Similarly, Adamawa’s personnel costs increased from N48.61 billion to N74.23 billion, a 52.7 percent rise.
In Akwa Ibom, a significant increase of N91.74 billion to N126.69 billion was approved, reflecting an outstanding 38.1 percent growth.

Anambra state, led by Governor Charles Soludo, also authorised a huge increase from N34.001 billion to N63.41 billion, representing an 86.45 percent hike.
Bauchi followed suit, increasing from N42.29 billion to N70.41 billion, representing a gain of nearly 66.5 percent.
Meanwhile, Bayelsa’s personnel costs rose from N60.18 billion to N114.21 billion, a more than 89 percent increase, indicating a focus on workforce development.

Cross River’s personnel costs increased dramatically from N35.02 billion to N106.12 billion, representing a 202% increase, one of the biggest among the states. Delta’s expenditure also increased significantly, from N139.999 billion to N185 billion, or a 32.5 percent increase.

Ebonyi followed suit, increasing from N23.076 billion to N36.66 billion, a 58.9% rise.
Edo’s increase from N74.58bn to N101.29bn was 35.8%, while Ekiti’s increase from N30.69bn to N62.51bn nearly doubled its personnel costs.
Enugu’s revenue also increased significantly, from N47.988 billion to N70.954 billion, a 48% increase.
However, Gombe stood out with a modest decrease in staff costs, which fell from N40.52bn to N40.28bn, a little 0.6% drop.

Imo, on the other hand, had a 60.9 percent gain, rising from N41.92 billion to N67.4 billion.
Jigawa saw a 76.4 percent increase in personnel costs, from N51.445 billion to N90.73 billion, while Kaduna’s personnel costs increased by 23.4%, from N68.010 billion to N83.94 billion.
Kano, one of the most significant increases in this analysis, saw its staff costs surge from N89.97 billion to a startling N150.996 billion, an astonishing 67.8 percent increase.

Katsina’s revenue increased from N29.69 billion to N58.62 billion, representing a 97.6 percent growth rate. Kogi’s personnel budget increased by 69.8 percent, from N64.798 billion to N109.96 billion.
Kwara followed a similar pattern, increasing from N51.045bn to N69.152bn, or 35.5 percent.
The highest increase came from Lagos, where personnel costs more than doubled from N225.114bn to N401.12 billion.

Personnel costs in Nasarawa jumped from N48.704bn to N80.456bn, a 65.2% increase, while Niger saw an even bigger jump, from N25.36bn to N104.301bn, a 311.5% increase. Ondo experienced an increase of 83.9 percent, from N75.96 billion to N139.726 billion, while Osun saw an 85.1 percent growth, from N55.571 billion to N102.89 billion.
Oyo had a huge increase in staff costs, jumping from N116.207 billion to N214.116 billion, an 84.3 percent increase.
Similarly, Plateau’s staff cost increased by 72.5 percent, from N38.963 billion to N67.144 billion.

Rivers State, under Governor Siminalayi Fubara, saw a remarkable growth from N167.05 billion to N343.196 billion, a 105.6 percent increase.
Sokoto also had a significant gain, from N55.32 billion to N64.711 billion, a 17% increase.
Taraba increased by 162%, from N36.319bn to N95.23bn, while Yobe increased by 34%, from N47.95bn to N64.12 billion.

Personnel costs in Zamfara increased moderately, from N34.21 billion to N58.38 billion, or a 70.7 percent rise.
Meanwhile, significant increases in pay and allowances among states have created a new set of issues.
With the dramatic increase in human expenditures, at least 27 states of the union now confront the stark reality that they will be unable to meet their payroll responsibilities unless they rely heavily on federal allocations from the central government.

This means that only 9 of the 36 state governments in the federation can pay their employees’ salaries without relying on federal funds.

According to an examination of state governments’ authorised budgets for the fiscal year 2024, this is an increase from 24 states that would be unable to pay salaries without federal assistance in 2024.
Lagos, Abia, Benue, Enugu, Ogun, Niger, Kaduna, Kwara, and Osun are the states with the highest domestic revenue.
According to the budget analysis, 27 states are unable to finance wage payments from their own revenue and may have to rely on federal government allocations or borrowing from banks and similar organisations.

The development also implies that the respective wage bills of the afflicted states have surpassed their respective IGRs, raising worries regarding worker productivity and state governments’ efficiency in internal revenue collection.
Speaking with The PUNCH, the economist stated that the most recent statistics emphasises the need to cut the cost of government throughout the country.

Commenting, the director and CEO of the Centre for the Promotion of Private Enterprise, Muda Yusuf, noted that there are several arguments for the state’s low revenue generation and its bloated civil service workforce.
He said, “The IGR thing, first of all, we need to recognize that there are big disparities in the natural endowment of the states. Not every state is equally equipped. You know, you can’t compare a state that is a coastal state like Lagos or Delta where you have a lot of oil companies, and they pay taxes through P.A.Y.E.

“If you take a state like Jigawa or a state like Gombe or a state like Kogi, most of the businesses there are SMEs. Most of them are agricultural businesses because most of them are farmers. How much IGR can you get from these people? So what you discover invariably is that the IGR that they get in those states are only from the salaries of the workers.

“The second argument is that many of them have the bloated workforce, which they don’t need. If you go to some ministries, many of them are carrying ghost workers. Some of them don’t even show up in their offices.
“Some of them can run all these ministries with half of the government’s workforce. But because of political and other considerations, they have too many workforces that they don’t need.”.

A professor of economics at Babcock University, Segun Ajibola, said, “The states must do all they can to raise internally generated revenue without putting undue pressure on their citizens. Secondly, they must reduce the cost of governance, block wastages, do proper streamlining of ministries, departments, and agencies,numberrofligacy, and ensure accountability and transparency in government.

A former chief economist at Zenith Bank, Marcel Okeke, pointed out that the increase in the ministries and governance at the centre would trickle down to the subnationals and impact their wage bill.

“Most of the things these governors do are done out of political considerations and not economic ones, from the location of companies to the appointments of aides; special advisers, senior special advisers, and so on. There are notorious cases of governors appointing hundreds or thousands of assistants. What are those people doing, and are they paid money? Can they not do with a fewer number of them?

“Do you know we have bloated staff? In some ministries, that should only have about 100,  they have 400 to 500, so a job that should be done by one person, you haveeee about five persons hanging around. What some people do is to carry files and they have no job. When these states do staff audits, they report ghost workers. If they look into this area, they can reduce cost,” he said.

Also, the Executive Director of the Rule of Law and Accountability Advocacy Centre, Okechukwu Nwagunma, lambasted Nigerian government officials for their lack of vision, sincerity, and patriotism.
Nwagunma pointed out that despite promises from the president to cut the cost of governance by reducing the number of appointees and ministries, the reality is the opposite—new ministries are being created, and a record number of appointees are being appointed.

He said, “The government at all levels in Nigeria is composed mainly of people who are visionless, insincere, unpatriotic, selfish, and insensitive to the suffering of the people they claim to serve.

“They do the opposite of everything they claim they will do. The president talked about reducing the cost of governance by pruning down the number of government appointees and ministries.  But the president is busy creating new ministries and appointing the highest ever number of appointees, both as ministers and aides.

“The same thing is happening at the state levels.  State governors appoint needless numbers of aides with almost every other aid having their aides.  While the state of the economy continues to worsen, with government policies unable to alleviate the suffering of the majority of Nigerians who continue to groan in deprivation, poverty, and hunger, the same government officials continue to live in obscene and provocative opulence and extravagant lifestyles. And they ask Nigerians to be patient and to continue to make sacrifices.”