FG tightens payroll checks as wage bill hits N1.96tn

The new directive, announced by Bawa Mokwa, Director of Press and Public Relations at the OAGF, requires all newly recruited federal employees to undergo additional checks before gaining admission into the Integrated Personnel and Payroll Information System (IPPIS).

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The measure comes as growing recurrent expenditure places increasing pressure on government finances, with the Federal Government spending approximately N267bn more on personnel obligations than on capital expenditure between January and March 2026.

According to the OAGF, the directive takes immediate effect and applies to all ongoing and subsequent payroll admission processes.

No newly recruited employee will be enrolled without first appearing on the nominal roll of the relevant ministry, department or agency (MDA) and meeting the prescribed eligibility requirements.

In its statement, the office said: “Henceforth, no newly recruited employee shall be enrolled without first being captured on the nominal roll of the relevant MDA and satisfying all prescribed validation and eligibility requirements.”

The strengthened process places greater responsibility on government agencies to establish the legitimacy of appointments and ensure that payroll records accurately reflect approved personnel obligations.

Under the arrangement, MDAs must submit formal applications accompanied by recruitment approvals, appointment letters, applicable waivers and other supporting documents.

Employee details, salary structures, grade levels, salary steps, allowances and other financial entitlements will also undergo verification.

The process will extend to statutory records, including Pension Fund Administrator information, pension identification numbers, National Housing Fund registration and tax details.

After the initial checks, employee records will return to the relevant agency for confirmation and endorsement by the Accounting Officer, Director of Human Resources, Director of Finance and Accounts, and designated Payroll Validating Officer.

The records will subsequently be returned to the OAGF for final processing. Admission into the federal payroll will depend on satisfactory completion of the verification exercise and approval by the Accountant-General of the Federation.

Permanent Secretaries, agency heads and other responsible officials have been instructed to ensure compliance.

Applications containing incomplete documentation or unresolved discrepancies will be deferred, while officers responsible for irregular approvals may face accountability measures.

The announcement follows a significant increase in the Federal Government’s wage obligations.

The first-quarter 2026 Budget Implementation Report showed that total personnel expenditure reached N1.96tn, compared with approximately N1.82tn in the corresponding period of 2025, representing an increase of 7.35 per cent.

A closer breakdown showed that personnel expenditure by MDAs rose from N1.57tn to N1.70tn, an increase of N133.94bn, or 8.54 per cent. Spending by Government-Owned Enterprises remained unchanged at N254.35bn.

The figures indicate that the increase in personnel spending was concentrated within ministries, departments and agencies rather than government-owned enterprises.

On average, the Federal Government spent approximately N652.37bn monthly on personnel costs during the quarter, compared with N607.73bn in the same period of 2025.

Despite the increase, actual MDA personnel expenditure remained below the quarterly budget projection.

The 2026 budget provided N8.35tn for MDA personnel costs, translating into a prorated quarterly allocation of N2.09tn. Actual expenditure of N1.70tn was therefore N385.78bn, or 18.47 per cent, below the projected amount.

The more pressing concern, however, lies in the relationship between recurrent obligations and investment in public infrastructure.

The Federal Government recorded total capital expenditure of N1.69tn in the first quarter, against a prorated projection of N8.07tn. The resulting shortfall was approximately N6.38tn, representing 79.06 per cent of the expected expenditure.

Particularly significant was the absence of capital fund releases for MDAs’ 2026 capital budget during the quarter, despite a prorated allocation of N3.92tn.

The Budget Office explained that some MDAs were still utilising funds released under the 2025 capital budget, whose implementation period had been extended to 31 December 2026. Consequently, implementation of the 2026 MDA capital budget remained at zero as of 31 March.

Other capital expenditure components nevertheless recorded spending. Government-Owned Enterprises accounted for N740.32bn, while the Tertiary Education Trust Fund recorded N393.56bn.

Multilateral and bilateral project-tied loans contributed N287.44bn, with grants and donor-funded projects accounting for N249.50bn.

The wider expenditure picture also revealed mounting pressure from other recurrent obligations. Non-debt recurrent expenditure increased from N2.24tn in the first quarter of 2025 to N2.77tn in the corresponding period of 2026.

Pension and gratuity payments, including service-wide pensions, rose sharply from N161.60bn to N330.72bn, an increase of N169.12bn, or 104.65 per cent.

When pensions and gratuities are combined with personnel expenditure, the Federal Government’s spending on these obligations reached approximately N2.29tn during the quarter.

The two categories are, however, classified separately in the budget implementation reports.

Revenue performance added another layer of difficulty.

The Federal Government generated approximately N5.08tn between January and March, against a quarterly target of N9.22tn, leaving a shortfall of 44.93 per cent.

Personnel expenditure alone was equivalent to 38.56 per cent of actual revenue. Debt-service payments reached N4.63tn, representing approximately 91.18 per cent of revenue.

Combined personnel and debt-service obligations amounted to N6.58tn, exceeding actual government revenue by approximately N1.51tn. The Federal Government consequently recorded a fiscal deficit of N4.69tn during the period.

The Budget Office acknowledged the need to contain recurrent expenditure, identifying restrictions on unapproved recruitment among the measures being pursued under the 2026-2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper.

The latest payroll intervention therefore represents an administrative response to concerns about expenditure control, although its effectiveness will depend on the quality of verification, enforcement and accountability across government institutions.

The development also comes at a sensitive time for public-sector workers, whose welfare demands have continued to feature prominently in negotiations with the government.

On 27 October 2026, the Federal Government and the Nigeria Labour Congress (NLC) reached an agreement in Abuja for a monthly transport allowance of N70,000 for public servants over six months, beginning in November.

The agreement followed renewed discussions on workers’ welfare, outstanding allowances and the rising cost of living.

It also provided for the payment of peculiar allowance arrears, effective from 1 May 2026, in three equal monthly instalments beginning in November.

However, the parties did not reach an agreement on the effective date for implementing the national minimum wage, although they agreed to establish a committee to continue negotiations.

The arrangement has also attracted differing reactions within organised labour.

The Trade Union Congress of Nigeria rejected the transport allowance agreement, while the Joint National Public Service Negotiating Council subsequently defended the arrangement and maintained that the agreement with the government should proceed.

The PUNCH estimated that the six-month transport intervention could cost approximately N465.7bn if all 1.1 million employee records on the federal payroll system qualified.

The estimate remains conditional, as the agreement did not establish the precise number of beneficiaries or the total amount budgeted.

Economists have meanwhile warned that the growing concentration of public resources on recurrent obligations could weaken Nigeria’s capacity to finance essential development projects.

Dr Aliyu Ilias, an economist, public affairs analyst and Chief Executive Officer of CSA Advisory, described the situation as an anomaly, particularly given the importance of infrastructure investment to the country’s long-term development.

Speaking to The PUNCH, Ilias said: “It is an anomaly to have personnel costs higher than capital expenditure because social infrastructure is very critical. It benefits education, healthcare, road infrastructure, among others.”

He acknowledged that salary payments remained essential, especially as workers continued to face declining purchasing power and inadequate disposable incomes.

However, he argued that the government needed to give greater attention to capital investment and improve oversight of budget implementation.

Ilias also called on the National Assembly to strengthen its scrutiny of public expenditure, particularly where repeated extensions of budget implementation periods make it more difficult to establish clear spending priorities.

Dr Tilewa Adebajo, an investment banking and financial policy expert and Chief Executive Officer of CFG Advisory, expressed similar concerns about the country’s fiscal position.

Adebajo said the figures reflected significant financial pressure on the government and raised questions about the sustainability of its economic reform programme.

“What you are telling me now is not a surprise. These numbers are not a surprise to us because it is clear from the way government has been spending that government is under severe fiscal pressure,” he said.

He argued that economic reforms would have limited impact on ordinary Nigerians unless they were supported by stronger productivity, private-sector investment, export diversification and improved household welfare.

“If you do not fund your capital budget, that is the investment needed to grow the economy. The economy will not grow,” Adebajo said.

The financial expert maintained that macroeconomic stability should serve as the foundation for broader economic prosperity rather than an end in itself.

The Federal Government’s latest payroll requirements could help strengthen the integrity of public personnel records, reduce irregular admissions and improve accountability for salary expenditure.

However, tighter administrative controls alone will not resolve the wider imbalance between recurrent spending, debt obligations and capital investment.

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The central challenge remains how to protect legitimate workers’ entitlements while creating sufficient fiscal space for infrastructure, healthcare, education and other productive investments capable of supporting sustainable economic growth.