The total personnel costs for state governments in Nigeria surged from N2.036 trillion in 2024 to N3.87 trillion in the 2025 approved budget, reflecting an increase of 90.23% due to the new N70,000 minimum wage and a rise in political appointments.
Key Takeaways:
Budget vs. Actual Payment: In 2024, states allocated N2.8 trillion for salaries but only disbursed N2.036 trillion, leaving a shortfall of N764 billion.
Dependence on Federal Allocations: 27 out of 36 states now require federal funding to meet salary obligations, up from 24 states in 2024. Only 9 states can pay salaries independently.
Highest Payroll Increases: Niger (311.5%), Cross River (202%), and Taraba (162%) saw the most significant hikes.
Lagos had the highest personnel cost, increasing from N225.1bn to N401.1bn.
Other states like Rivers, Kano, and Oyo also saw substantial rises in their wage bills.
Labour Unions’ Ultimatum: The NLC has demanded full implementation of the minimum wage by December 1, 2024, but several states have yet to comply.
Criticism of Governance: Economists and analysts warn that the growing wage bill, bloated civil service, and political patronage strain state finances. Many states are urged to cut unnecessary expenditures, address ghost workers, and improve internally generated revenue (IGR).
Despite promises of cost-cutting by the federal and state governments, critics argue that excessive political appointments and unnecessary ministries continue to drain public funds, worsening economic struggles.
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