By Seun Ibiyemi
The Federal Government spent N9.39 trillion on wage adjustments, minimum wage increases and allowances for public sector workers between June 2023 and December 2025, more than the N5.4 trillion it received as its share of savings from the removal of the petrol subsidy.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Wednesday during a Channels Television media briefing on the Federal Government’s economic reform programme.
Oyedele said the figures highlighted the significant financial obligations that accompanied the government’s economic reforms since President Bola Tinubu assumed office.
According to him, the Federal Government generated about N20.4 trillion in additional resources during the 31-month period through savings from petrol subsidy removal, increased independent revenue and additional borrowing.
However, the minister said the additional resources were largely absorbed by increased government expenditure and other financial obligations.
He put the government’s total incremental expenditure during the period at N30.64 trillion, with wage-related expenses accounting for N9.39 trillion.
Oyedele said the increase in workers’ remuneration was necessary following the implementation of wage adjustments and the new national minimum wage.
He noted that the amount spent on higher wages exceeded the Federal Government’s entire share of the savings generated from petrol subsidy removal.
The minister also disclosed that the Federal Government spent N9.37 trillion on servicing external debt during the same period.
He attributed a significant portion of the increase in the naira cost of external debt servicing to the depreciation of the naira.
Oyedele explained that Nigeria’s foreign-denominated obligations are settled in dollars, meaning that a weaker naira increases the amount required in local currency to meet the same debt obligations.
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Using an illustration, he said an obligation that previously required about N460 to the dollar would require substantially more naira when the exchange rate moved to around N1,415/$.
He stressed that the government could not simply postpone its debt obligations because failure to meet them could have serious consequences for the country.
The minister’s disclosure comes amid continued debate over the deployment of savings from the petrol subsidy removal and the broader fiscal impact of the government’s economic reforms.
The figures also underscore the competing demands on government finances, as increased revenues and subsidy savings have been accompanied by higher wage bills, debt-servicing costs and other expenditure obligations.
