The Federal Government has announced a significant increase in personnel costs, projecting a rise of at least 60 percent in 2025.

This increase is attributed to the implementation of the new national minimum wage and necessary adjustments across all levels of the federal civil service.

According to the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper, which was recently approved by the Federal Executive Council, the personnel expenditure budget for 2024 stands at N4.1 trillion.

With a 60 percent increase, this will add approximately N2.46 trillion, bringing the total personnel cost to around N6.56 trillion.

In July 2024, President Bola Tinubu approved an increase in the minimum wage for Nigerian workers from N30,000 to N70,000. Federal workers have begun receiving this new wage; however, the rollout has been uneven across states, with some yet to adopt the new minimum.

While over 20 states have committed to meeting the N70,000 threshold, others have pledged even higher wages. The Nigerian Labour Congress has issued an ultimatum to non-compliant state governments to implement the new minimum wage by December 1, 2024.

The MTEF report indicates that as of August 2024, N2.67 trillion—65 percent of the appropriated amount for personnel costs—has already been disbursed. The report forecasts that personnel costs will rise significantly to accommodate the updated national minimum wage, with projections showing that costs for FY2023 were N3.83 trillion and are expected to reach N6.56 trillion in 2025 due to these adjustments.

Additionally, the government has allocated a total of N9.64 trillion for personnel and pension costs in its budget proposal, reflecting an increase of N3.56 trillion or 58.7 percent compared to 2024. This rise is primarily driven by the new minimum wage and related adjustments.