FG spent N9.39tn on wage hike, allowances in 31 months — Oyedele

FG Spent N9.39tn on Wage Hikes, Allowances in 31 Months — Oyedele

The Federal Government spent N9.39tn on minimum wage increases, salary adjustments and other allowances for public workers between June 2023 and December 2025, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said.

Minister of the Economy, Taiwo Oyedele

The amount exceeded the Federal Government’s share of the savings generated from the removal of the petrol subsidy during the 31-month period.

Oyedele disclosed this at a media conference on Nigeria’s reform scorecard, titled “The Benefits, Costs and Harm Prevented,” aired on Channels Television on Wednesday.

The revelation offers a new perspective on the debate over the proceeds of subsidy removal, showing that the Federal Government’s additional spending on workers was higher than the N5.4tn it received as its share of the N15.8tn in resources mobilised for the Federation through subsidy removal and foreign exchange reforms.

The disclosure also comes as the Federal Government prepares to begin fresh negotiations with the Nigeria Labour Congress next year over a new minimum wage for civil servants.

During the briefing, Oyedele said the Federal Government generated N20.4tn in additional resources during the period through subsidy-related savings, increased independent revenue and additional borrowing.

However, he said the funds were deployed to meet rising government obligations rather than left unused.

He said N9.39tn—the largest single expenditure item—was spent on wage adjustments, increases in the national minimum wage and other allowances for public workers.

Oyedele said, “That money did not sit idle. It partly funded incremental expenses. For that same period, the incremental expenses of the Federal Government alone, not the Federation, were N30.64tn.

“Of this amount, N9.39tn went to wage adjustments, minimum wage increases and allowances for public workers.

“I think this is a point that should be of interest to everyone. The incremental amount that the Federal Government spends paying higher wages is more than the entire savings that the Federal Government earned from subsidy removal.”

The minister said another N9.37tn was spent on servicing external debt, largely because the depreciation of the naira increased the domestic-currency cost of meeting dollar-denominated obligations.

“So, if we’re paying $1bn, but instead of N460 to the dollar, it is now N1,415, we have to pay more naira,” Oyedele explained.

He added, “When you have debt service to pay, you don’t negotiate, you don’t delay—you pay, because delay or default has consequences.”

The disclosure provides an answer to a question that has persisted since President Bola Tinubu announced the removal of the petrol subsidy in May 2023: where did the savings go?