FG has tightened payroll verification as personnel costs hit N1.96tn and exceeded capital spending.
NewsOnline Nigeria reports that the Federal Government has introduced stricter verification requirements for newly recruited public servants seeking admission into its payroll system, as personnel expenditure rose to N1.96tn in the first quarter of 2026, exceeding capital spending by approximately N267bn.
The new directive, announced on Monday by the Office of the Accountant-General of the Federation (OAGF), requires all newly recruited employees to undergo comprehensive verification before being enrolled on the Integrated Personnel and Payroll Information System (IPPIS).
The development comes amid growing pressure on government finances, with an analysis of the Federal Government’s first-quarter budget implementation reports for 2025 and 2026 showing that personnel expenditure increased by 7.35 per cent, from N1.82tn to N1.96tn.
In a statement signed by the Director of Press and Public Relations, Bawa Mokwa, the OAGF said the directive takes immediate effect and applies to all ongoing and subsequent payroll admission processes.
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The office stated that no newly recruited employee would be enrolled without first being captured on the nominal roll of the relevant Ministry, Department or Agency (MDA) and satisfying all prescribed validation and eligibility requirements.
The statement read, “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.”
According to the 2026 First Quarter Budget Implementation Report, the Federal Government spent N1.96tn on personnel costs between January and March, compared with N1.69tn on capital expenditure.
Personnel costs accounted for 20.05 per cent of the Federal Government’s total expenditure of N9.76tn, while capital expenditure represented 17.32 per cent.
A breakdown showed that personnel expenditure by MDAs increased from N1.57tn in the first quarter of 2025 to N1.70tn in the corresponding period of 2026, representing an increase of N133.94bn, or 8.54 per cent.
However, personnel expenditure by Government-Owned Enterprises remained unchanged at N254.35bn, indicating that the increase in the reported wage bill was driven by spending across MDAs.
The figures showed that the Federal Government spent an average of N652.37bn monthly on personnel costs during the review period, compared with N607.73bn in the corresponding period of 2025.
Despite the increase, actual personnel spending remained below the quarterly budget projection.
The Budget Office disclosed that N8.35tn was allocated to MDAs’ personnel costs in the 2026 budget, compared with N7.60tn in 2025, representing an increase of approximately N758.51bn, or 9.99 per cent.
The report stated that N1.70tn was released for MDA personnel costs in the first quarter, N385.78bn, or 18.47 per cent, below the prorated quarterly projection of N2.09tn.
Capital expenditure records significant shortfall
While personnel expenditure continued to rise, implementation of the Federal Government’s capital budget remained significantly below expectations.
The report showed that total capital expenditure of N1.69tn fell short of the prorated quarterly projection of N8.07tn by N6.38tn, representing a shortfall of 79.06 per cent.
More significantly, no funds were released for the implementation of MDAs’ 2026 capital budget during the quarter, despite a prorated allocation of N3.92tn.
Explaining the development, the Budget Office said some MDAs were still utilising funds released under the 2025 capital budget, whose implementation period had been extended to December 31, 2026.
Consequently, implementation of the 2026 MDA capital budget stood at zero as of March 31.
However, capital expenditure was recorded under other components, including Government-Owned Enterprises, the Tertiary Education Trust Fund and externally financed projects.
Government-Owned Enterprises accounted for N740.32bn in capital expenditure, while TETFund spending stood at N393.56bn.
Multilateral and bilateral project-tied loans contributed N287.44bn, while grants and donor-funded projects accounted for N249.50bn.
The pressure on government finances was also reflected in non-debt recurrent expenditure, which increased from N2.24tn in the first quarter of 2025 to N2.77tn in the corresponding period of 2026, representing an increase of approximately N523.49bn.
Personnel costs accounted for 70.73 per cent of non-debt recurrent expenditure during the period.
Expenditure on pensions and gratuities, including service-wide pensions, also increased from N161.60bn to N330.72bn, representing a rise of N169.12bn, or 104.65 per cent.
When pensions and gratuities are combined with personnel costs, the Federal Government’s expenditure on these obligations reached N2.29tn, compared with N1.98tn in the corresponding period of 2025.
Revenue shortfall, debt servicing worsen fiscal pressure
The rising expenditure obligations coincided with weak revenue performance.
According to the Budget Office, the Federal Government generated approximately N5.08tn in the first quarter of 2026, against a quarterly target of N9.22tn, representing a shortfall of 44.93 per cent.
Personnel costs alone were equivalent to 38.56 per cent of actual government revenue, compared with approximately 36.80 per cent in the corresponding period of 2025.
This means that for every N100 generated by the Federal Government during the quarter, nearly N39 went towards personnel expenditure.
Debt-service payments further constrained government finances, reaching N4.63tn, equivalent to approximately 91.18 per cent of actual revenue.
Combined personnel costs and debt-service obligations amounted to N6.58tn, exceeding 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, noting that restrictions on unapproved recruitment remained part of the government’s expenditure management measures.
It stated that the Federal Government continued to pursue its objective of curbing the growth of recurrent expenditure as outlined in the 2026-2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper.
The report added that key initiatives included an embargo on unapproved recruitment by MDAs.
It also explained that recruitment and payroll enrolment requests must first obtain clearance from the Budget Office, while efforts to extend IPPIS coverage across federal establishments were ongoing.
FG outlines new payroll verification requirements
Under the new arrangement, MDAs will assume greater responsibility for managing personnel budgets and maintaining accurate nominal rolls.
The OAGF said agencies seeking to enrol newly recruited employees must submit formal requests accompanied by recruitment approvals, appointment letters, applicable waivers and other supporting documents.
The documents will undergo verification alongside salary structures, grade levels, salary steps, allowances and other financial entitlements to establish the legitimacy of appointments and accuracy of payroll obligations.
The statement added that the validation process would also cover statutory details, including Pension Fund Administrator information, pension identification numbers, National Housing Fund registration and tax records to ensure accurate deductions and timely remittances.
Following the initial verification, employee records will be forwarded to the relevant MDA 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.
The office stated that final admission into the Federal Government payroll would depend on the successful completion of all validation procedures and approval by the Accountant-General of the Federation.
Permanent Secretaries, Heads of Agencies and other relevant officials have been directed to ensure strict compliance with the new requirements.
The OAGF warned that incomplete documentation or unresolved discrepancies would result in the deferment of payroll admission until all necessary conditions were satisfied.
It also warned that officers responsible for processing and approving payroll admissions would be held accountable for breaches of applicable rules and regulations.
N70,000 monthly allowance raises wage bill concerns
The Federal Government’s wage obligations are also expected to increase following its approval of a monthly N70,000 transport allowance for public servants beginning in November.
The allowance followed a conciliation meeting between the government and the Nigeria Labour Congress in Abuja.
The agreement provides for the payment across all levels of the public service for six months, although it did not specify the number of beneficiaries or the total amount budgeted for the intervention.
The six-month transport allowance estimation could cost the Federal Government approximately N465.7bn if all 1.1 million employee records on its payroll system qualify for the payment.
Economists have, however, called for sustainable measures to reduce commuting costs and ease pressure on household budgets.
The Trade Union Congress of Nigeria rejected the N70,000 wage award, instead demanding an immediate salary increase for workers and the implementation of outstanding agreements with health workers under the Joint Health Sector Unions.
Economists demand fiscal discipline
Reacting to the expenditure figures, Nigerian economist, public affairs analyst and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, expressed concern that personnel expenditure had exceeded capital spending, warning that the trend could undermine investment in critical infrastructure.
Speaking in an interview with The PUNCH, Ilias said the government needed to prioritise capital projects because of their importance to education, healthcare, transportation and other essential services.
He 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.”
The economist argued that the expenditure pattern was particularly troubling because salaries and debt-service obligations were consuming resources needed for development.
While acknowledging that both obligations were difficult to avoid, especially amid declining purchasing power and reduced disposable income among workers, he said the situation raised concerns about the government’s fiscal priorities.
“Remember that debt servicing is an obligation that you must meet, and salary payment is something you cannot delay. Even if you look at purchasing power, it is very poor. Disposable income is not enough for people to manage,” he said.
Ilias also criticised repeated extensions of budget implementation periods, arguing that the practice had weakened clarity and accountability in public expenditure.
He called on the National Assembly to strengthen its oversight of budget implementation and demand explanations for the government’s spending priorities.
He added that improved revenue collection and potential gains from higher crude oil prices should provide opportunities for increased infrastructure investment.
According to him, lawmakers have a responsibility to scrutinise government expenditure decisions and ensure Nigerians receive adequate information on how public resources are utilised.
Also speaking, investment banking and financial policy expert and Chief Executive Officer of CFG Advisory, Dr Tilewa Adebajo, warned that Nigeria’s fiscal position was becoming increasingly difficult to sustain, with recurrent obligations and debt servicing limiting resources available for productive investment.
Adebajo said the figures reflected the severe fiscal pressure facing 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 warned that macroeconomic reforms alone would not deliver meaningful improvements in living standards without stronger economic growth, fiscal discipline and investment in productive sectors.
“Reforms by themselves are definitely not enough,” he said.
The financial expert stressed that capital expenditure was essential to expanding the economy, warning that persistent underfunding of development projects could undermine the benefits of macroeconomic stabilisation.
“If you do not fund your capital budget, that is the investment needed to grow the economy. The economy will not grow,” Adebajo said.
He argued that the government needed to prioritise policies capable of stimulating productivity, attracting private investment, expanding exports and improving household welfare.
“The next phase must be fiscal discipline, productivity, private sector investment and export diversification, and improvements in household welfare,” he stated.
Adebajo maintained that Nigeria needed a credible strategy to achieve economic growth of between eight and 10 per cent, noting that macroeconomic stability should serve as the foundation for economic prosperity rather than its ultimate destination.
He further expressed concern about the government’s borrowing plans and transparency in public expenditure, calling for stronger scrutiny of compliance with fiscal regulations.
