Rising personnel costs and concerns over the management of public finances have prompted the Federal Government to introduce tougher verification requirements for newly recruited workers seeking admission into its payroll.
Under the new directive, Ministries, Departments and Agencies (MDAs) must submit comprehensive documentation and complete prescribed verification procedures before newly employed personnel can be enrolled in the Integrated Personnel and Payroll Information System (IPPIS).
The Office of the Accountant-General of the Federation (OAGF) announced the new measures on Monday in a statement signed by its Director of Press and Public Relations, Bawa Mokwa.
The office said the directive takes immediate effect and applies to all ongoing and subsequent payroll admission processes, signalling tighter scrutiny of requests by government agencies to enrol newly recruited employees.
The move comes against the backdrop of rising personnel expenditure, which climbed to N1.96tn in the first quarter of 2026, surpassing capital expenditure of N1.69tn by approximately N267bn.
An analysis by BrandIconImage of the Federal Government's first-quarter budget implementation reports for 2025 and 2026 showed that personnel costs increased by N133.94bn from N1.82tn recorded in the corresponding period of 2025.
The increase represents a 7.35 per cent year-on-year rise, highlighting the growing share of government revenue and expenditure commitments devoted to salaries and related personnel costs.
The OAGF, in outlining the new requirements, said the government would no longer admit newly recruited employees into its payroll without proper documentation and confirmation by their respective establishments.
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 projects.
The figures indicate that salaries and other personnel obligations accounted for 20.05 per cent of the government's total expenditure of N9.76tn, while capital spending represented 17.32 per cent.
A breakdown of the expenditure showed that personnel costs incurred 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, suggesting that the increase in the reported wage bill was entirely driven by spending across MDAs.
On a monthly basis, the Federal Government spent an average of N652.37bn on personnel obligations during the three-month period, compared with N607.73bn in the first quarter of 2025.
Despite the increase, actual personnel expenditure remained below the government's budgetary provision for the period.
The Budget Office disclosed that N8.35tn was appropriated for MDAs' personnel costs in the 2026 budget, up from N7.60tn in 2025, representing an increase of approximately N758.51bn, or 9.99 per cent.
The report stated, “The sum of N8.35tn was appropriated for MDAs Personnel Cost in the 2026 Budget. This translates to a prorated quarterly expenditure outlay of N2.09tn in 2026. Actual expenditure of N1.70tn was released in the first quarter of 2026, translating to N385.78bn (18.47 percent) below the quarterly projection for the year.”
While personnel expenditure continued to rise, the implementation of the government's capital budget recorded a significant shortfall, raising further concerns about the balance between recurrent spending and investment in infrastructure.
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 79.06 per cent shortfall.
More concerning was the absence of capital releases to MDAs for the implementation of their 2026 capital budgets during the quarter, despite a prorated allocation of N3.92tn.
Explaining the development, the Budget Office said some government agencies were still utilising funds released under the 2025 capital budget, whose implementation period had been extended to December 31, 2026.
The report stated, “Funds for MDAs’ capital expenditure were not released in the first quarter of 2026 because some MDAs were still utilising funds released under the 2025 capital budget, whose implementation period had been extended to 31st December, 2026.”
Consequently, implementation of the 2026 capital budget for MDAs 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.
GOEs accounted for N740.32bn, while TETFund expenditure 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 public 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 a rise of approximately N523.49bn.
Personnel costs accounted for 70.73 per cent of the non-debt recurrent expenditure during the period.
Similarly, expenditure on pensions and gratuities, including service-wide pensions, more than doubled from N161.60bn to N330.72bn, representing an increase of N169.12bn, or 104.65 per cent.
When combined, personnel costs and pension obligations amounted to N2.29tn in the first quarter of 2026, compared with N1.98tn in the corresponding period of the previous year. The budget implementation reports, however, classify pensions and gratuities separately from personnel expenditure.
The rising expenditure coincided with disappointing revenue performance, further limiting the government's capacity to meet its financial obligations and fund development projects.
The Budget Office reported that the Federal Government generated approximately N5.08tn in revenue during the first quarter, against a quarterly target of N9.22tn, representing a shortfall of 44.93 per cent.
Personnel expenditure alone was equivalent to 38.56 per cent of actual revenue, compared with approximately 36.80 per cent in the first quarter of 2025.
In practical terms, the government spent nearly N39 out of every N100 it generated during the period on personnel costs.
Debt servicing placed an even greater burden on the nation's finances, reaching N4.63tn, equivalent to approximately 91.18 per cent of actual revenue.
Combined personnel and debt-service obligations amounted to N6.58tn, exceeding the government's actual revenue by approximately N1.51tn.
The Federal Government consequently recorded a fiscal deficit of N4.69tn during the quarter.
Against this background, the Budget Office reiterated the government's commitment to controlling recurrent expenditure, particularly through restrictions on unapproved recruitment into the public service.
It stated, “The FGN continued to pursue its goal of curbing the growth of recurrent expenditure as stated in the 2026-2028 MTEF/FSP.”
The report added, “Key initiatives aimed at reducing recurrent costs were therefore pursued vigorously during the period. This includes the embargo on unapproved recruitment by MDAs.”
It further explained that recruitment and payroll enrolment requests must obtain clearance from the Budget Office, while the government continued efforts to extend IPPIS coverage across federal establishments.
Under the new arrangement, MDAs will bear greater responsibility for managing personnel budgets and ensuring that their nominal rolls accurately reflect legitimate employees.
Agencies seeking to enrol newly recruited workers must submit formal applications supported by recruitment approvals, appointment letters, applicable waivers and other relevant documents.
The OAGF will also examine salary structures, grade levels, salary steps, allowances and other financial entitlements to establish the authenticity of appointments and ensure that payroll obligations are accurately calculated.
The verification process will extend to statutory information required for deductions and remittances.
The statement added, “The validation process will 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 documents will subsequently be returned to the OAGF for final processing and approval.
The office stated, “Final admission into the Federal Government payroll will be subject to satisfactory completion of all validation procedures and the approval of 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 applications containing incomplete documentation or unresolved discrepancies would be deferred until all outstanding conditions were met. It also cautioned that officials responsible for processing and approving payroll admissions would be held accountable for violations of existing rules and regulations.
Transport allowance adds to wage concerns
The new payroll restrictions come as the Federal Government prepares to introduce additional financial support for public servants, a development that could further increase its recurrent expenditure obligations.
The government recently approved a monthly transport allowance of N70,000 for public servants beginning in November, following a conciliation meeting with the Nigeria Labour Congress in Abuja.
The agreement provides for the payment across all levels of the public service for six months. However, it did not specify the number of beneficiaries or the total amount earmarked for the intervention.
BrandIconImage estimated that the six-month transport allowance 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 more sustainable measures to reduce commuting costs and ease the financial pressure on workers and households.
The Trade Union Congress of Nigeria rejected the N70,000 wage award, insisting that the government should instead implement an immediate salary increase and honour outstanding agreements with health workers under the Joint Health Sector Unions.
Experts demand fiscal discipline
Reacting to the expenditure figures, a Nigerian economist, public affairs analyst and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, expressed concern that personnel spending had overtaken capital expenditure, warning that the development 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 described the spending pattern as troubling, particularly as salaries and debt-service obligations continued to consume resources that could otherwise be channelled into development projects.
While acknowledging that salary payments and debt servicing were unavoidable government obligations, he noted that the country's economic situation and declining purchasing power made the need for responsible expenditure management even more urgent.
“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 the repeated extensions of budget implementation periods, arguing that the practice had weakened transparency, clarity and accountability in public expenditure.
He urged the National Assembly to strengthen its oversight functions and demand explanations from the executive on how public funds were being allocated and utilised.
“When we don’t have clear budgets, these are the things that we are likely to see,” he said.
He added that improved revenue collection and potential gains from higher crude oil prices should provide the government with an opportunity to increase investment in infrastructure.
According to him, lawmakers must ensure that the government's spending decisions are properly scrutinised and that Nigerians receive clear information on how public resources are being managed.
Investment banking and financial policy expert and Chief Executive Officer of CFG Advisory, Dr Tilewa Adebajo, also cautioned that Nigeria's fiscal position is becoming increasingly unsustainable, citing rising recurrent expenditure and debt servicing obligations as major constraints on economic growth.
He argued that the growing cost of running government was leaving fewer resources for productive investments, potentially weakening the long-term prospects of the government's economic reform programme.
Adebajo said the country's financial challenges were evident in its spending pattern, noting that the latest fiscal figures reflected mounting pressure on government finances.
“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 stressed that ongoing macroeconomic reforms would not automatically translate into improved living conditions for Nigerians without corresponding economic growth, fiscal discipline and increased investment in productive sectors.
“Reforms by themselves are definitely not enough,” he said.
The CFG Advisory chief executive warned that inadequate funding of capital projects could further weaken Nigeria's growth prospects, explaining that investments in infrastructure were necessary to expand the country's productive capacity and stimulate economic activities.
“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 called on the government to prioritise policies that would improve productivity, encourage private-sector participation, strengthen export capacity and enhance the welfare of households.
According to him, Nigeria's next phase of economic management should focus on addressing these critical areas rather than relying solely on efforts to stabilise macroeconomic indicators.
“The next phase must be fiscal discipline, productivity, private sector investment and export diversification, and improvements in household welfare,” he stated.
Adebajo also advocated a more ambitious economic growth strategy, arguing that Nigeria should pursue an annual growth rate of between eight and 10 per cent to achieve meaningful economic transformation.
He maintained that macroeconomic stability should provide the platform for broader prosperity and not be treated as the ultimate objective of economic reforms.
“Macroeconomic stability is the foundation for economic prosperity. It is not the destination,” he said.
Beyond concerns about expenditure and economic growth, the financial policy expert questioned the government's borrowing plans and the transparency surrounding public spending.
He called for closer monitoring of government borrowing, stricter enforcement of fiscal regulations and greater accountability in the management of public funds to ensure that borrowed resources deliver measurable economic benefits.