Oyedele: Wage Increase Gulped N9.39trn from Petrol Subsidy Savings in Two Years

The federal government says it spent N9.39 trillion on wage adjustments, minimum wage increases and allowances for public servants between June 2023 and December 2025.

Taiwo Oyedele, minister of finance and coordinating minister of the economy spoke on Wednesday at a press conference in Abuja on the financial impact of the economic reforms introduced by the administration of President Bola Tinubu.

In June 2024, Tinubu approved the increase of minimum wage from N30,000 to N70,000 after assenting to the national minimum wage legislation.

The legislation provides for a review of the minimum wage every three years.

Against this backdrop, Oyedele said the federal government spent N9.39 trillion on wage adjustments, minimum wage increases and allowances between June 2023 and December 2025.

He said the amount spent on wages during the period exceeded the federal government’s entire share of resources generated from the removal of the petrol subsidy.

“The incremental amount that the federal government spends paying higher wages is more than the entire savings that the federal government earned from subsidy removal,” Oyedele said.

According to the minister, the federal government received N5.4 trillion from the N15.8 trillion in resources mobilised for the federation through the subsidy removal and foreign exchange reforms between June 2023 and December 2025.

The remaining N10.4 trillion was shared among state and local governments.

Oyedele said the resources generated through the reforms, alongside additional revenue and borrowing, gave the federal government incremental resources of N20.4 trillion during the period.

However, the federal government’s incremental expenditure stood at N30.64 trillion.

He said, besides the N9.39 trillion spent on wages, N9.37 trillion went to external debt servicing, while N6.5 trillion was spent on strategic infrastructure.

Oyedele said the increase in wage expenditure reflected adjustments made by the government following the removal of the petrol subsidy.

The government removed the subsidy in June 2023, triggering an increase in the price of petrol and putting pressure on household and business costs.

Oyedele said the reforms had come with significant costs for Nigerians, but the government had also taken steps to mitigate their impact.

The minister said the decisions came at a “real cost, and we are not here to pretend otherwise”.