THE Federal Government spent N9.39trillion on minimum wage increases, salary adjustments and other allowances for public workers between June 2023 and December last year.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this at a news conference on Nigeria’s reform scorecard, titled, ‘The Benefits, Costs and Harm Prevented,’ on Wednesday, August 19.
The amount was higher than the Federal Government’s share of the savings generated from the removal of the petrol subsidy during the 31-month period, as its additional spending on workers was higher than the N5.4trillion it received as its share of the N15.8trillion in resources mobilised for the Federation through subsidy removal and foreign exchange reforms.
The disclosure came ahead of the Federal Government’s fresh negotiations with the Nigeria Labour Congress (NLC) next year over a new minimum wage for civil servants.
During the briefing, Oyedele said the Federal Government generated N20.4trillionn in incremental resources during the period from subsidy-related savings, increased independent revenue and additional borrowing, adding, however, that the resources were deployed to meet rising government obligations, rather than left idle.
The minister said N9.39trillion, the largest single expenditure item, was spent on wage adjustments, increases in the national minimum wage and other allowances for public workers, noting: “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, was N30.64trillion. Of these, N9.39trillion went to wage adjustments, minimum wage increases, and allowances for public salaries.
“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.”
He explained that another N9.37trillion was spent on servicing external debt, largely because of the naira’s depreciation, which increased the domestic currency cost of meeting dollar-denominated obligations, adding: “So, if we’re paying N1billion, but instead of N460, it’s now N1,415, that’s more naira than we need to incur.
“When you have debt service to pay, you don’t negotiate, you don’t delay, you pay, because delay or default has consequences.”
The minister said the figures showed that the reforms were not introduced primarily to increase government revenue, but to address “entrenched corruption in the artificially managed fuel subsidy and foreign exchange markets.”
