The total budget for personnel costs, including salaries and allowances for state civil servants, has risen sharply from N2.036 trillion in 2024 to N3.87 trillion in the approved 2025 budget. This increase, driven by the implementation of the newly approved N70,000 minimum wage and a rise in political appointments, represents a 90.23 percent surge.
Data obtained from the 2025 approved budgets of the 36 state governments reveal that despite an initial allocation of N2.8 trillion for salaries in 2024, states ultimately disbursed only N2.036 trillion—falling short by N764 billion, according to the budget implementation report.
A report published on Open States, a BudgIT-backed budget tracking platform, indicates that at least 27 states may struggle to pay workers’ salaries in 2025 without relying on federal allocations from the central government.
The rise in personnel costs follows President Bola Tinubu’s approval in July 2024 of a significant increase in the national minimum wage from N30,000 to N70,000 after extensive negotiations with labor unions. However, while some states have implemented the new wage, others have yet to comply fully, prompting the Nigerian Labour Congress (NLC) to issue a December 1, 2024, deadline for state governments to adopt the policy.
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Despite pressure from labor unions, many states are still lagging in implementing the wage increase, delaying expected financial relief for workers. An in-depth analysis of the budget documents reveals significant disparities in personnel cost increases across the states, with some experiencing over 100 percent growth while others registered more modest rises.
Sharp Increases Across States
Abia, Cross River, Ekiti, Niger, Rivers, and Taraba states recorded the highest percentage increases in payroll costs, exceeding 100 percent compared to their 2024 budgets. On the other hand, Gombe, Osun, and Ondo had the lowest increases, all below 15 percent.
Among the states with the most significant increases, Cross River’s personnel cost skyrocketed by 202 percent, from N35.02 billion to N106.12 billion, the highest percentage increase in the country. Niger followed with a 311.5 percent jump, from N25.36 billion to N104.301 billion. Rivers State also saw a dramatic rise, from N167.05 billion to N343.196 billion, representing a 105.6 percent increase.
Other states witnessing sharp personnel cost hikes include:
Abia: N33.045 billion to N77.34 billion (134 percent increase)
Adamawa: N48.61 billion to N74.23 billion (52.7 percent increase)
Akwa Ibom: N91.74 billion to N126.69 billion (38.1 percent increase)
Anambra: N34.001 billion to N63.41 billion (86.45 percent increase)
Bayelsa: N60.18 billion to N114.21 billion (89 percent increase)
Ekiti: N30.69 billion to N62.51 billion (103.6 percent increase)
Kano: N89.97 billion to N150.996 billion (67.8 percent increase)
Lagos: N225.114 billion to N401.12 billion (78.3 percent increase)
Oyo: N116.207 billion to N214.116 billion (84.3 percent increase)
States with Modest Increases or Declines
While most states recorded substantial hikes in personnel costs, Gombe reported a slight decline from N40.52 billion to N40.28 billion, representing a 0.6 percent drop. Osun and Ondo saw the smallest increases, remaining below 15 percent.
Implications for State Finances
With the sharp rise in personnel costs, concerns have emerged over the ability of states to sustain salary payments without depending heavily on federal allocations. Analysts warn that states unable to generate sufficient Internally Generated Revenue (IGR) may struggle to meet the increased wage obligations without making drastic budgetary adjustments.
Meanwhile, labor unions continue to pressure state governments to fully implement the new minimum wage policy, urging compliance to ensure improved welfare for civil servants across the country.
As Nigeria navigates this financial shift, the coming months will determine how effectively state governments can balance rising personnel costs with sustainable economic management.
