Nigeria’s Personnel Cost Rises by 79.48% In Four Years

According to data obtained from the budget implementation report of the Federal Government, the amount budgeted for personnel costs has increased from N2.29 trillion spent in 2019 to N4.11 trillion in the proposed 2022 budget.

This shows an increase of N1.82 trillion or 79.48 percent in three years-a rise in the cost of recurrent expenditure.

The personnel cost was N1.69tn in 2016. In 2017, it rose to N2.90tn, representing an increase of N1.21tn or 71.60 per cent.

In 2018, the personnel cost rose by N7bn or 2.41 per cent, with personnel costs gulping N2.97tn.

The following year, the personnel cost was reduced by N68bn, dropping to N2.29tn. However, the budget rose again in 2020 to N3.05tn, representing an increase of N760bn or 33.19 per cent.

It was the same year that the new minimum wage was first reflected in the budget. This is believed to have contributed significantly to the increment.

In 2021, the cost continued to soar as N3.75tn was budgeted for personnel costs, representing an increase of N7bn or 22.95 per cent. Of the 3.75tn budget, about N2.57tn had been spent from January to August.

2022 proposed budget

In the latest 2022 budget proposal, the personnel cost hit an all-time high of N4.11tn, representing an increase of N360bn.

The proposed personnel cost represents 25.08 percent of the nation’s entire budget and is the single largest component in the budget.

The number of MDAs captured on the Integrated Payroll and Personnel Information System increased from 459 in 2017 to 711 to 2021.

Between 2016 till date, a total of N20.76tn has been budgeted for personnel costs. This total exceeds the N16.39tn budget in the proposed 2022 budget and is about 63.80 percent of Nigeria’s debt stock of N35.47tn.

BudgIT, a non-profit organisation, calculated that the 400,000-strong federal civil service, a mere 0.21 percent of the nation’s population, was earmarked to take 27 per cent of the initial 2020 budget of N10.33tn. The current strength of the federal civil service for 2021 could not be ascertained as of time of going to press.

However, the government plans to borrow N5.01 trillion, while the rest of the deficit will be financed by multilateral and bilateral loan drawdown and privatisation proceeds.

Kehinde Ogunyale

Reporting on the data-driven economy, and investigations.

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