The Nigerian Federal Government (FGN) expects a significant increase in personnel and pension expenses for 2025, mostly due to the new national minimum wage and related adjustments.This is detailed in the recently published 2025-2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which explains the government’s planned spending.
The document shows that personnel and pension costs are predicted to go up from N6.07 trillion in 2024 to N9.64 trillion in 2025, which is a 58.7% increase. This rise is a result of the financial impact of the wage adjustments and shows the increasing financial strain on government resources.
The document says:
“N9.64 trillion (which includes N1.02 trillion for Government-Owned Enterprises) is planned for personnel and pension costs. This is an increase of N3.56 trillion or 58.7% compared to the 2024 budget, and it is mainly because of the new minimum wage and its related adjustments.”
Nigeria’s spending on regular (non-debt) expenses, which includes salaries, pensions, and other administrative costs, is expected to increase a lot. These expenses will go up from 11.27 trillion Naira in 2024 to 14.21 trillion Naira in 2025, which is a 26% rise. They are predicted to keep growing to 14.38 trillion Naira in 2026 and 14.59 trillion Naira in 2027, showing that keeping the government running will continue to be costly.
Salaries for government departments and agencies are expected to increase a lot too, from 4.79 trillion Naira in 2024 to 7.17 trillion Naira in 2025, which is a 49.7% increase. Similarly, costs for government-owned companies will rise from 608 billion Naira in 2024 to 1.02 trillion Naira in 2025, a 67.2% increase.
Overall, combined salaries will go up from 5.4 trillion Naira in 2024 to 8.19 trillion Naira in 2025, a 51.7% increase. By 2026, these costs are expected to reach 8.47 trillion Naira, and then increase to 8.79 trillion Naira in 2027.
The significant 58.7% rise in personal and pension raises concerns about fiscal sustainability. The rising expenditure will put pressure on the government’s finances.
