The amount allocated for personnel expenses, including salaries and allowances for state civil servants, has risen from N2.036 trillion spent in 2024 to N3.87 trillion in the approved 2025 budget.

Although the 36 sub-national governments budgeted a total of N2.8 trillion for salaries, they only disbursed N2.036 trillion throughout 2024, a reduction of N764 billion, according to the budget implementation report.

Data from the 2025 approved budget for all 36 state governments shows an almost 90.23 percent increase due to the introduction of the new N70,000 minimum wage and the rise in political appointments.

These figures are also available on Open States, a platform supported by BudgIT, which serves as a repository for government budget data.

The report also revealed that at least 27 states in the federation would not be able to pay workers’ salaries this year without waiting for federal allocations from the central government.

In July 2024, President Bola Tinubu approved a substantial increase in the minimum wage for Nigerian workers, raising it from N30,000 to N70,000.

This decision came after months of intensive negotiations between the government and labor unions.

However, the implementation of the new wage increase has been gradual across the country, with some states still not adopting the revised minimum wage.

In response to this delay, the Nigerian Labour Congress issued a stern ultimatum to state governments, demanding full implementation of the new wage by December 1, 2024.

Despite this pressure, many states have yet to begin paying the revised minimum wage, further delaying the financial relief workers expected.

An in-depth analysis of the budget documents revealed significant disparities in personnel costs across states. 20 states experienced a personnel cost increase of over 50%, while 16 states saw more moderate increases below 50%.

A closer examination revealed that states like Abia, Cross Rivers, Ekiti, Niger, Rivers, and Taraba saw the highest increase in their payroll, exceeding 100% of their 2024 personnel cost budget. Conversely, states such as Gombe, Osun, and Ondo had the lowest salary increase percentages, staying below 15%.

Detailed analysis of salary increases across states showed that Abia saw a notable rise in personnel costs, escalating from N33.045 billion to N77.34 billion, a 134% increase. Similarly, Adamawa’s personnel costs rose from N48.61 billion to N74.23 billion, a 52.7% increase.

In Akwa Ibom, personnel costs surged from N91.74 billion to N126.69 billion, reflecting a 38.1% growth.

Anambra state, under Governor Charles Soludo, also approved a significant rise from N34.001 billion to N63.41 billion, indicating an 86.45% increase.

Bauchi followed suit with an increase from N42.29 billion to N70.41 billion, showcasing an uplift of about 66.5%.

Meanwhile, Bayelsa saw its personnel costs climb from N60.18 billion to N114.21 billion, a rise of over 89%, indicating a strong investment in its workforce.

In Cross River, the personnel cost grew sharply from N35.02 billion to N106.12 billion, a 202% increase, one of the highest among the states. Delta also recorded a significant increase from N139.999 billion to N185 billion, reflecting a 32.5% rise.

Ebonyi had an increase from N23.076 billion to N36.66 billion, growing by 58.9%.

Edo’s personnel expenses surged from N74.58 billion to N101.29 billion, a 35.8% increase, while Ekiti saw a notable rise from N30.69 billion to N62.51 billion, almost doubling its personnel cost.

Enugu also experienced a substantial rise from N47.988 billion to N70.954 billion, a 48% increase.

However, Gombe stood out with a slight decrease in personnel costs, falling from N40.52 billion to N40.28 billion, a dip of just 0.6%.

On the other hand, Imo saw an increase from N41.92 billion to N67.4 billion, showing a rise of 60.9%.

Jigawa’s personnel costs jumped from N51.445 billion to N90.73 billion, a 76.4% increase, while Kaduna’s personnel expenses grew by 23.4%, rising from N68.010 billion to N83.94 billion.

Kano, which saw one of the largest increases, saw its personnel costs surge from N89.97 billion to N150.996 billion, a staggering 67.8% rise.

Katsina, with an increase from N29.69 billion to N58.62 billion, experienced a growth rate of 97.6%. Kogi’s personnel budget grew from N64.798 billion to N109.96 billion, an increase of 69.8%.

Kwara followed a similar trend, rising from N51.045 billion to N69.152 billion, a growth of 35.5%.

Lagos saw the largest increase, more than doubling its personnel costs from N225.114 billion to N401.12 billion.

In Nasarawa, personnel expenses rose from N48.704 billion to N80.456 billion, a 65.2% increase, while Niger saw an even more significant leap from N25.36 billion to N104.301 billion, a growth of 311.5%. Ondo experienced an increase from N75.96 billion to N139.726 billion, an 83.9% rise, while Osun also registered a significant increase, from N55.571 billion to N102.89 billion, an 85.1% growth.

Oyo experienced a massive increase in personnel costs, rising from N116.207 billion to N214.116 billion, an 84.3% increase.

Similarly, Plateau saw its personnel expenditure climb from N38.963 billion to N67.144 billion, marking a 72.5% increase.

Rivers State, under Governor Siminalayi Fubara, recorded a remarkable rise from N167.05 billion to N343.196 billion, a 105.6% increase.

Sokoto also saw a significant increase, from N55.32 billion to N64.711 billion, a 17% rise.

Taraba experienced a notable increase from N36.319 billion to N95.23 billion, a 162% rise, while Yobe recorded a 34% increase, rising from N47.95 billion to N64.12 billion.

Zamfara saw a moderate increase, with personnel costs rising from N34.21 billion to N58.38 billion, a growth of 70.7%.

Meanwhile, the substantial rise in salaries and allowances across various states has introduced new challenges.

With the sharp increase in personnel costs, at least 27 states now face the reality of being unable to meet their payroll obligations without depending on federal allocations from the central government.

This means only 9 out of the 36 state governments can independently pay their workers without relying on federal funds.

This represents an increase from 24 states that couldn’t cover their salaries without federal assistance in 2024, based on the analysis of state governments’ approved budgets for the 2024 fiscal year.

States with strong internal revenue include Lagos, Abia, Benue, Enugu, Ogun, Niger, Kaduna, Kwara, and Osun.

According to the budget analysis, 27 states cannot cover their salary expenses from internally generated revenue alone and may have to rely on federal allocations or borrow from banks and related institutions.

This situation means the wage bills in these states now surpass their internally generated revenue, raising concerns about worker productivity and the states’ efficiency in generating revenue.

Speaking (with The Punch), the economist emphasized that the latest data highlights the need to reduce governance costs across the country.

Commenting on the situation, Muda Yusuf, director and CEO of the Centre for the Promotion of Private Enterprise, argued that several factors contribute to states’ low revenue generation and bloated civil service workforces.

He explained, “The IGR issue must be recognized, as there are significant disparities in states’ natural resources. You can’t compare a coastal state like Lagos or Delta, which have numerous oil companies that pay taxes through P.A.Y.E., with states like Jigawa, Gombe, or Kogi, where most businesses are SMEs, and agriculture is predominant. How much IGR can you generate from these businesses? Essentially, these states rely heavily on workers’ salaries for IGR.

“The second issue is the bloated workforce many states have, which they don’t need. In some ministries, there are ghost workers, and some employees don’t even show up at work. Some ministries could operate efficiently with half the staff they have. But due to political pressures and other factors, they carry far too many workers.”

Professor Segun Ajibola, an economics professor at Babcock University, emphasized that states must strive to raise internal revenue without putting excessive pressure on their citizens. He also urged states to reduce governance costs, eliminate waste, streamline ministries, and improve transparency.

Marcel Okeke, former chief economist at Zenith Bank, pointed out that the expansion of ministries and governance at the national level would impact subnational wage bills.

“Most decisions by governors are politically driven rather than economically sound,” he stated. “From the location of companies to the appointment of aides and advisers, there are cases of governors appointing hundreds or thousands of assistants. What are these people doing? Can’t they manage with fewer assistants? Additionally, many ministries are bloated, with positions that should be held by one person being filled by five people, some of whom carry files without contributing meaningfully. Conducting staff audits can help address these issues.”

Okechukwu Nwagunma, executive director of the Rule of Law and Accountability Advocacy Centre, criticized 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.”

Credit: The Punch