The Federal Government spent N9.39tn on wage adjustments, minimum wage increases and other allowances for public workers between June 2023 and December 2025, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has disclosed.
Oyedele made the disclosure on Wednesday, August 19, 2026, during a media conference on the government’s reform scorecard, titled “The Benefits, Costs and Harm Prevented,” aired on Channels Television.
According to the minister, the amount spent on workers during the 31-month period exceeded the N5.4tn share of subsidy-removal savings received by the Federal Government.
The development provides fresh insight into how additional resources generated from the removal of petrol subsidies and foreign exchange reforms were deployed.
Oyedele said the Federal Government generated N20.4tn in incremental resources during the period through subsidy-related savings, increased independent revenue and additional borrowing.
However, he said the resources were largely absorbed by rising government obligations, with total incremental Federal Government expenditure reaching N30.64tn.
“Of these, N9.39tn went to wage adjustments, minimum wage increases, and allowances for public salaries,” Oyedele said.
He added that the Federal Government’s spending on higher wages was greater than the savings it received directly from petrol subsidy removal.
The minister said another N9.37tn was spent on servicing external debt, with the naira’s depreciation significantly increasing the local currency cost of dollar-denominated obligations.
Oyedele explained that a higher exchange rate meant the government needed substantially more naira to meet the same dollar debt obligations.
“So, if we’re paying $1bn, but instead of N460, it’s now N1,415. That’s more naira than we need to incur,” he said.
He added that debt obligations could not simply be deferred because failure to meet payments could have wider financial consequences.
The figures come as the Federal Government prepares for fresh discussions with organised labour over a new minimum wage for public workers next year.
The government’s wage bill has risen significantly since the removal of the petrol subsidy in May 2023, as authorities introduced measures aimed at cushioning the impact of higher living costs and implemented the new minimum wage.
Oyedele’s disclosure also shifts the focus of the subsidy-removal debate from the size of savings generated to the competing fiscal obligations that have absorbed additional government resources.
The Federal Government had previously said subsidy removal and foreign exchange reforms generated N15.8tn in resources for the Federation, with the Federal Government receiving N5.4tn as its share.
However, the latest figures indicate that increased personnel costs and foreign debt servicing alone accounted for N18.76tn of incremental expenditure during the period.
The development highlights the fiscal pressure facing the government as it balances wage demands, debt obligations and other expenditure commitments against efforts to increase revenues and reduce fiscal deficits.
