Sharp Increase in Personnel Costs Across States
The budget for personnel expenses, including salaries and allowances for state civil servants, has risen significantly in 2025. Compared to the N2.036 trillion spent in 2024, the approved budget for this year has climbed to N3.87 trillion.
Although all 36 states had allocated a total of N2.8 trillion for salaries in 2024, only N2.036 trillion was actually disbursed throughout the year, resulting in an underspend of N764 billion, as indicated in the budget implementation report.
Impact of New Minimum Wage and Political Appointments
The substantial increase in personnel costs is largely due to the implementation of the newly approved N70,000 minimum wage and the rise in political appointments. This adjustment reflects an overall personnel cost increase of approximately 90.23%.
According to data from Open States, a BudgIT-backed platform that compiles government budget data, at least 27 states are expected to struggle with salary payments this year unless they receive financial support from the federal government.
New Minimum Wage Implementation Delays
In July 2024, President Bola Tinubu approved a minimum wage hike from N30,000 to N70,000 after extensive negotiations between the government and labour unions. However, implementation has been inconsistent across the country, with several states yet to adopt the new wage structure.
Due to these delays, the Nigerian Labour Congress (NLC) issued an ultimatum to state governments, demanding full implementation by December 1, 2024. Despite this, some states have yet to comply, prolonging the financial relief workers anticipated.
State-by-State Breakdown of Personnel Cost Changes
There is significant variation in personnel cost increases among the states:
- 20 states recorded increases exceeding 50%.
- 16 states had more modest increases, staying below the 50% threshold.
- Six states—Abia, Cross River, Ekiti, Niger, Rivers, and Taraba—saw payroll costs surge by over 100%.
- Three states—Gombe, Osun, and Ondo—registered the lowest increase, remaining under 15%.
States with the Highest Increase in Personnel Costs
- Cross River: N35.02bn → N106.12bn (202% increase)
- Abia: N33.045bn → N77.34bn (134% increase)
- Katsina: N29.69bn → N58.62bn (97.6% increase)
- Ekiti: N30.69bn → N62.51bn (103.6% increase)
- Kogi: N64.798bn → N109.96bn (69.8% increase)
- Kano: N89.97bn → N150.996bn (67.8% increase)
States with Moderate Increases
- Bayelsa: N60.18bn → N114.21bn (89% increase)
- Bauchi: N42.29bn → N70.41bn (66.5% increase)
- Imo: N41.92bn → N67.4bn (60.9% increase)
- Ebonyi: N23.076bn → N36.66bn (58.9% increase)
- Adamawa: N48.61bn → N74.23bn (52.7% increase)
States with the Smallest Increase or Reduction
- Gombe: N40.52bn → N40.28bn (0.6% decrease)
- Osun and Ondo recorded increases of less than 15%.
The rise in personnel costs across Nigerian states highlights the financial strain of implementing the new minimum wage and political appointments. While some states have seen their payroll budgets more than double, others have managed to keep their increases relatively low. However, the challenge remains—most states will struggle to meet these new financial obligations without federal assistance.
