The amount allocated for personnel costs, including salaries and allowances for state civil servants, has surged from ₦2.036 trillion in 2024 to ₦3.87 trillion in the approved 2025 budget. This sharp rise—driven by the implementation of the newly approved ₦70,000 minimum wage and an increase in political appointments—marks an almost 90.23% increase in personnel expenses across Nigeria’s 36 states.
Despite an initial ₦2.8 trillion budgeted for salaries in 2024, only ₦2.036 trillion was ultimately disbursed, reflecting a shortfall of ₦764 billion, according to the states’ budget implementation reports.
An analysis of the 2025 approved budgets of the 36 states has revealed that at least 27 states will be unable to pay workers’ salaries without federal allocations. This is an increase from 24 states in 2024, signaling worsening financial independence at the sub-national level.
In contrast, only nine states—Lagos, Abia, Benue, Enugu, Ogun, Niger, Kaduna, Kwara, and Osun—are expected to meet their payroll obligations without federal support due to their robust internally generated revenue (IGR).
The personnel cost surge has varied across states, with some experiencing dramatic increases exceeding 100%.
Cross River saw the sharpest spike in payroll expenses, jumping 202% from ₦35.02 billion to ₦106.12 billion. Niger State recorded an astonishing 311.5% increase, from ₦25.36 billion to ₦104.301 billion. Lagos, Nigeria’s economic hub, doubled its wage bill from ₦225.114 billion to ₦401.12 billion. Rivers State saw its personnel costs skyrocket by 105.6%, rising from ₦167.05 billion to ₦343.196 billion.
Meanwhile, some states recorded more moderate increases. Gombe, Osun, and Ondo saw the lowest percentage increases, with Gombe even recording a slight decline of 0.6%, from ₦40.52 billion to ₦40.28 billion.
The dramatic rise in personnel costs has raised concerns about financial sustainability, with experts calling for urgent reforms to curb the rising cost of governance. Economists have attributed the problem to a bloated civil service, ghost workers, and excessive political appointments. Many states continue to rely on federal allocations to stay afloat, raising questions about their long-term economic viability.
Despite the wage increase, implementation remains inconsistent. Several states are yet to adopt the new minimum wage, prompting the Nigeria Labour Congress (NLC) to issue a deadline for full compliance by December 1, 2024. However, delays persist, leaving many workers without the financial relief they had anticipated.
As financial pressures mount, experts have urged state governments to improve revenue generation, streamline their workforce, and cut excessive spending. With 27 states unable to sustain their wage bills without federal allocations, the need for economic reforms and financial discipline has never been more urgent.
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